A Comparison of the Financial Management Characteristics of UK vs. EU Manufacturing Firms

Gulser Meric (), Stephanie Weidman (), Carol Welsh () and Ilhan Meric ()
Additional contact information
Gulser Meric: Rowan University, Rohrer College of Business, United States
Stephanie Weidman: Rowan University, Rohrer College of Business, United States
Carol Welsh: Rowan University, Rohrer College of Business, United States
Ilhan Meric: Rider University, College of Business Administration, United States

REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, 2017, vol. 18, issue 2, 138-147

Abstract: When two economies are integrated, the financial management characteristics of firms in the two economies tend to become similar. Germany and France are two original members of the EU since 1957 and they have fully integrated economies. The UK joined the EU in 1973. In a recent national referendum, British people voted to leave EU membership. It is often argued that, although the UK was a member of the EU, it was not a part of the European Monetary System and UK economy has never fully integrated with the EU economy. In this paper, we test this hypothesis by comparing the financial management characteristics of UK manufacturing firms with the financial management characteristics of EU manufacturing firms (as represented by a combined sample of German and French Manufacturing firms). Our MANOVA test statistics indicate that the financial management characteristics of UK and EU manufacturing firms are significantly different. Accounts receivable collection period is significantly shorter and inventory turnover is significantly higher in UK firms than in EU firms. However, EU firms have significantly higher total assets turnover compared with UK manufacturing firms. UK manufacturing firms use more debt financing (i.e., they have more bankruptcy risk), and they have higher profitability ratios, compared with EU manufacturing firms.

Keywords: Financial Ratios; UK, German, and French manufacturing firms; MANOVA (Multivariate Analysis of Variance). (search for similar items in EconPapers)
JEL-codes: G30 G31 G32 G33 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rmci.ase.ro/no18vol2/01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rom:rmcimn:v:18:y:2017:i:2:p:138-147

Access Statistics for this article

REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT is currently edited by Marian Nastase

More articles in REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT from Faculty of Management, Academy of Economic Studies, Bucharest, Romania Contact information at EDIRC.
Bibliographic data for series maintained by Marian Nastase ().