Understanding Determinants of Firm Performance: An Analysis of Non-Financial Factors

Anna Maria Calce, Anna Paola Micheli and Hazar Altinbas

International Business Research, 2025, vol. 18, issue 4, 54

Abstract: This study examines the influence of non-financial factors on the performance of 303 Italian small and medium-sized enterprises over the period 2012-2021. The analysis employs a panel data model with random effects. Performance indicators (ROA, ROE, EBIT, EBITDA and CFOR) are regressed on the variables of interest (firm age, gender of the direct manager, ownership structure and religiosity). Control variables include firm-specific financial data; sectoral dummy variables are used to account for industry effects. Ownership structure has a significant positive impact on firm performance, especially in terms of ROA and EBIT. Firm age shows a negative relationship with EBIT. The gender of the direct manager exhibits a marginal impact on ROA, while religiosity does not significantly influence any of the performance indicators. For managers, these findings highlight the importance of carefully balancing ownership structure to optimize performance while avoiding the risks associated with excessive concentration. Furthermore, while certain non-financial factors like firm age and manager gender may influence performance, their impact appears context-dependent and may not be as significant as previously thought. This study provides empirical evidence on the impact of non-financial factors on firm performance in the context of Italian SMEs. The results underscore the complexity of these relationships and the need for further research to explore the contextual factors that may moderate their impact.

Date: 2025
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