Financial Performance Among Top10 Automotive Leaders in the EU: Essential Techniques to Investigate the Structure of Moments While Using the GMM with Dynamic Panel Data

Heryán Tomáš (), Růčková Petra () and Giovanni Cerulli
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Heryán Tomáš: Department of Finance and Accounting, School of Business Administration, Silesian University, Czech Republic
Růčková Petra: Department of Finance and Accounting, School of Business Administration, Silesian University, Czech Republic

Studia Universitatis „Vasile Goldis” Arad – Economics Series, 2024, vol. 34, issue 3, 26-59

Abstract: The automotive industry is widely considered to be crucial for the economy, as it reflects economic development in general. Despite interest in financial performance, few studies have considered paying attention to the ownership structure among stockholders. Hence, the study aims to find out how the degree of ownership concentration, measured through the independence indicator of the Bureau van Dijk, is reflected in the financial management of companies in the automotive industry among selected European countries. The generalized method of moments (GMM) technique is widely used while investigating panel data with a short estimating period, i.e. nine years annually in this case. However, this study reveals that, without deploying techniques, subsequently introduced a modified version of GMM estimators with panel data by providing an implementation using Stata statistical software. Otherwise, these particular econometric tools to analyze a dynamic panel can often give false significant estimates. Overall, liquidity seems to be significant in the case of firms with less concentrated ownership, whereas companies with a major owner are affected more by selected macroeconomic variables.

Keywords: Financial Performance; Ownership structure; EU automotive industry; Dynamic panel estimation (search for similar items in EconPapers)
JEL-codes: C58 D25 E21 G39 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:suvges:v:34:y:2024:i:3:p:26-59:n:1002

DOI: 10.2478/sues-2024-0012

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