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Empirical Research Towards the Factors Influencing Corporate Financial Performance on the Bucharest Stock Exchange

Empirical Research Towards the Factors Influencing Corporate Financial Performance on the... This study aims to investigate the potential factors of influence on corporate financial performance, by using the panel data regression analysis. The research was employed for a sample consisting of 40 companies listed on the Bucharest Stock Exchange, over the period 2010-2012. Corporate financial performance considered as the dependent variable was proxied through return on assets, return on equity, and Tobin’s Q ratio. There were selected the following factors that could influence corporate financial performance: capital structure, firm size, and corporate social responsibility involvement. Likewise, several control variables have been introduced: structure of the ownership and institutional investors. The results show a strong negative relationship between corporate financial performance and debt to equity ratio. Also, there has been revealed a positive influence of the company size on performance, although weak. Furthermore, the relationship between financial performance and social performance has been statistically validated, both using accounting and market ratios. Keywords: corporate financial performance, capital structure, firm size, corporate social responsibility JEL classification: C10, G32, M14 1. INTRODUCTION Performance is economically reflected by the companies’ profitability. Given that business value is important for all the stakeholders involved, the research of factors which affect performance is essential. For maximizing the interest http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Annals of the Alexandru Ioan Cuza University - Economics de Gruyter

Empirical Research Towards the Factors Influencing Corporate Financial Performance on the Bucharest Stock Exchange

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Publisher
de Gruyter
Copyright
Sciendo is a De Gruyter company © 2018. ALL RIGHTS RESERVED Powered by PubFactory
ISSN
2068-8717
DOI
10.2478/aicue-2014-0009
Publisher site
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Abstract

This study aims to investigate the potential factors of influence on corporate financial performance, by using the panel data regression analysis. The research was employed for a sample consisting of 40 companies listed on the Bucharest Stock Exchange, over the period 2010-2012. Corporate financial performance considered as the dependent variable was proxied through return on assets, return on equity, and Tobin’s Q ratio. There were selected the following factors that could influence corporate financial performance: capital structure, firm size, and corporate social responsibility involvement. Likewise, several control variables have been introduced: structure of the ownership and institutional investors. The results show a strong negative relationship between corporate financial performance and debt to equity ratio. Also, there has been revealed a positive influence of the company size on performance, although weak. Furthermore, the relationship between financial performance and social performance has been statistically validated, both using accounting and market ratios. Keywords: corporate financial performance, capital structure, firm size, corporate social responsibility JEL classification: C10, G32, M14 1. INTRODUCTION Performance is economically reflected by the companies’ profitability. Given that business value is important for all the stakeholders involved, the research of factors which affect performance is essential. For maximizing the interest

Journal

Annals of the Alexandru Ioan Cuza University - Economicsde Gruyter

Published: Dec 1, 2014

Keywords: Business and Economics; Political Economics; Political Economics, other

References