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Reexamination of the determinants of firms’ growth in periods of crisis

Zbornik radova Ekonomskog fakulteta u Rijeci, 2020-06, Vol.38 (1), p.101-124 [Peer Reviewed Journal]

2020. This work is published under https://creativecommons.org/licenses/by-nc-nd/4.0 (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 1331-8004 ;EISSN: 1846-7520 ;DOI: 10.18045/zbefri.2020.1.101

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Title:
Reexamination of the determinants of firms’ growth in periods of crisis
Author: Malinić, Dejan ; Denčić-Mihajlov, Ksenija ; Grabiński, Konrad
Subjects: Assets ; Banking ; Capital ; capital market ; Capital markets ; Cash flow forecasting ; Companies ; company-specific variable ; Corporate growth ; Corporate profits ; country-specific variable ; crisis ; Debt ; Economic crisis ; Efficiency ; Financial leverage ; firm growth ; Hypotheses ; Inflation ; Infrastructure ; International finance ; Leverage ; Macroeconomics ; Necessity ; Profit margins ; Profitability ; Recessions ; Regional variations ; Variables
Is Part Of: Zbornik radova Ekonomskog fakulteta u Rijeci, 2020-06, Vol.38 (1), p.101-124
Description: The recent financial crisis has underlined the necessity to recognize why some firms and economies are more severely affected while others are more resilient to crisis and how different financial characteristics affect firms' growth path. In order to explore these issues empirically, we reexamine the determinants of corporate growth during the crisis and post-crisis period (2008-2013) on the sample of 10 Central and East European countries belonging to two different regional groups - "Visegrad four" and the group of former Yugoslavian countries. Our analysis covers the sample of 3,660 firm-year observations. We model firm growth as a function of two country-specific variables (inflation and capital market liquidity) and four company-specific variables (financial leverage, asset turnover, profit margin and ratio between cash flow and assets). Our study indicates the importance of infrastructure prerequisites and macroeconomic policies for the companies' growth in the conditions of crisis. Our results reveal a specific relation between leverage and firm growth during the crisis period, whereby the impact of leverage is perceived by a comprehensive result of the degree of firm indebtedness, the level of capital market development, the position of banking sector and the cost of debt. Finally, our results show some intriguing patterns in firm profitability - growth as well as asset efficiency - growth relation.
Publisher: Rijeka: Sveuciliste u Rijeci
Language: English;German
Identifier: ISSN: 1331-8004
EISSN: 1846-7520
DOI: 10.18045/zbefri.2020.1.101
Source: ProQuest Central
DOAJ Directory of Open Access Journals

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Reexamination of the determinants of firms’ growth in periods of crisis

2020. This work is published under https://creativecommons.org/licenses/by-nc-nd/4.0 (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;ISSN: 1331-8004 ;EISSN: 1846-7520 ;DOI: 10.18045/zbefri.2020.1.101

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