Transformations  in
Business & Economics

A SECTORAL INVESTIGATION OF FACTORS AFFECTING FIRMS’ FINANCIAL PERFORMANCE IN EU COUNTRIES
Nicoleta Barbuta-Misu, Vasile Dinu, Mara Madaleno, Florina Oana Virlanuta, Otilia Rica Man, Cristina Elena Badiu (Cazacu)

ABSTRACT: This paper investigates how some financial factors and crises affect firms’ financial performance, expressed by return on assets and return on equity. The data used was a sample of large firms acting in seven different sectors, except the financial sector, over a ten-year period. Using panel estimations, including and excluding the financial crisis period, it was assessed how these factors affect firms’ financial performance in different sectors from EU28 countries. The results confirmed the influences of some determinants on financial performance found in previous literature for some sectors of activity; also, the paper brings new achievements by studying large European firms acting in analysed sectors. The results achieved can be important to investors, managers, and academics as knowledge about variables, factors, and mutual influences by sectors allow better forecasts and better short and medium-term strategies in each sector of activity.

KEYWORDS:  financial performance; sectoral analysis; degree of debts; liquidity; solvency; asset turnover; capital repayment; labour productivity; crisis.

JEL classification:  G32, E22, M21, O16