Industry and Size Effects in Corporate Performance: An Empirical Research on Selected EU Countries
Journal Title: International Journal of Financial Economics - Year 2014, Vol 2, Issue 2
Abstract
The aim of the paper is to analyse the influence of industry specific factors and firm size on corporate performance in the EU countries. Most of the hitherto analyses have focused on corporate performance reflected mainly in stock returns. This paper is one of the few attempts to consider fundamental ratios, which might also be useful indicators for investment decisions based on corporate performance. The analysis is meant to find whether the corporate performance reflected in financial ratios is affected by industry or size effect more, and therefore to compare the relative importance of the two effects. The financial ratios are obtained from harmonised aggregated financial statements published by the European Commission in the BACH database. The ratios characterize three major analytical areas of enterprises, i.e. their profitability, liquidity and solvency. The data analysed relates to three size groups, thirteen industries, ten countries and nine years: 1999-2007. The applied methodology includes analysis of variance and classification method of k-means grouping. Findings provide empirical evidence that in most cases the industry effect tends to dominate over the size effect.
Authors and Affiliations
Julia Koralun-Bereźnicka
The Importance of Mathematics in the Recording and Interpretation of Accounting
Everyone has heard that Mathematics and accounting go hand in hand, though not as intertwined as people may believe or sometimes that you should have a lot of math to take accounting. Unfortunately, for many people, ju...
Evaluating the Productivity of Faith based Hospitals in Tanzania: Application of Malmquist Productivity Index (MPI) Approach
In this study we estimate the productivity of Not For Profit (NFP) hospitals in Tanzania over sampled period from 2001/2002- 2011/2012, of which most of them belongs to faith based orgarnisations. Faith based orgarnisa...
Divisia Monetary Aggregates and Demand for Money in Nigeria
The Nigerian financial system has undergone several transformations over the past few decades leading to financial innovations. These innovations have altered the definition and use of monetary aggregates as a monetary...
The Cashless Policy and Foreign Direct Investment in Nigeria: A Vector Error Correction Model (VECM) Approach
The study undertakes an econometric research to analyze the cashless policy and its effectiveness on attracting foreign direct investment in Nigeria using quarterly data of 2006 to 2012. The log linear vector error cor...
Across Tax Mountains Assessing the Impact of Competition on the Laffer Curve
Regarding states and state-like entities as producers and taxation as a price for the goods and services provided by State, and, more importantly, as a price for the existence of the State itself, this study connects t...