Financial Performance (Dis)parity in Post-transition Europe

• Autorzy: Lorena Mošnja-Škare
• Języki publikacji: EN

Abstrakty

EN

Decades after the transition processes have spread across Central, Eastern, and South-Eastern Europe (CESEE), the former Soviet Union, and the Baltic, it was interesting to perform the post-transition and non-transition advanced European economies comparison to capture the outcomes of the 'catching-up process' . In this analysis, I tried to reach the results of this 'catching process' using the firm-level accounting data, namely, enterprises' annual accounts rather than countries' national accounts. The goal was to evaluate if post-transition countries' enterprises have reached the financial performance of non-transition countries' enterprises across Europe, three decades after the transition processes began. The research captured firm-level financial performance aspects revealing some differentiators, namely, financial report indicators that differed for the enterprises belonging to post-transition countries in comparison with the ones belonging to non-transition countries in Europe. The findings related to the liquidity, solvency, indebtedness, profitability indicators, and labor intensity ratio were derived by logit regression models. The observations for 569 European companies were provided by Orbis Europe for the year 2021 annual accounts. According to the results, enterprises in post-transition countries, characterized by lower total assets and working capital scale, were likely to have lower profit margins, share of employees' costs in operating turnover, current ratio, and gearing, while higher solvency and liquidity ratio. Mild marginal effects indicated the gap narrowed but with still existing significant disparities, particularly in the field of liquidity. (original abstract)

Słowa kluczowe

EN

Financial indicators; Financial performance; Political and systemic transformations

PL

Wskaźniki finansowe; Wynik finansowy; Przekształcenia ustrojowo-systemowe

• Czasopismo: Contemporary Economics
• Rocznik: 2024
• Tom: 18
• Numer: nr 1
• Strony: 1--16

Twórcy

autor

Lorena Mošnja-Škare

• Juraj Dobrila University of Pula, Croatia

Bibliografia

• Aghion, P., Harmgart, H., & Weisshaar, N. (2010). Fostering growth in CEE countries: a country-tailored approach to growth policy. (European Bank for Reconstruction and Developmen Working Paper No. 118) https://www.ebrd.com/downloads/research/economics/workingpapers/wp0118.pdf
• Bierut, B.K., & Kuziemska-Pawlak, K. (2017). Competitiveness and export performance of CEE countries. Eastern European Economics, 55(6), 522-542. https://doi.org/10.1080/00128775.2017.1382378
• Bah, H.M., & Brada, J.C. (2009). Total factor productivity growth, structural change and convergence in the new members of the European Union. Palgrave Macmillan Comparative Economic Studies, 51(4), 421-446. https://doi.org/10.1057/ces.2009.8
• Botoc, C., & Anton, S.G. (2017). Is profitability driven by working capital management? Evidence for high-growth firms from emerging Europe. Journal of Business Economics and Management, 18(6), 1135-1155. https:// doi.org/10.3846/16111699.2017.1402362
• Botrić, V. (2021). Firm-level inefficiency in post-transition economies. Enterprise Research Innovation, 7(1), 34-43. https://doi.org/10.54820/FKSQ7558
• Botrić, V., Božić, Lj., & Broz, T. (2017). Explaining firm-level total factor productivity in post-transition: manufacturing vs. services sector. Journal of International Studies, 10(3), 77-90. https://doi.org/10.14254/2071-8330.2017/10-3/6
• Brada, J.C., King, A.E., & Ma, C.Y. (1997). Industrial economics of the transition: Determinants of enterprise efficiency in Czechoslovakia and Hungary. Oxford Economic Papers, 49(1), 104-127. https:// doi.org/10.1093/oxfordjournals.oep.a028593
• Campos, N.F. (2021). The EU anchor thesis: transition from socialism, institutional vacuum and membership in the European Union. In E. Douarin, & O. Havrylyshyn. (Eds.), Palgrave Handbook of Comparative Economics (pp. 353-368). Palgrave Macmillan. https://doi.org/10.1007/978-3-030-50888-3_14
• Curea, S.C., Belascu, L., & Barsan, A.-M. (2020). An exploratory study of financial performance in CEE Countries. KnE Social Sciences, 4(1), 286-300. https:// doi.org/10.18502/kss.v4i1.5995
• Deliktas, E., & Balcilar, M. (2005). A comparative analysis of productivity growth, catch-up, and convergence in transition economies. Emerging Markets Finance and Trade, 41(1), 6-28. https://doi.org/10.1080/1540496X.2005.11052598
• European Bank for Reconstruction and Development. (2016). Transition report 2015-16. Rebalancing Finance. https://www.ebrd.com/news/publications/transition-report/ebrd-transition-report-201516.html
• Galgóczi, B., & Drahokoupil, J. (2017). Introduction. Abandoning the FDI-based economic model driven by low wages in Condemned to be left behind? In B. Galgóczi, & J. Drahokoupil. (Eds.), Can Central and Eastern Europe emerge from its low-wage model? (pp. 7-24). ETUI aisbl, Brussels. D/2017/10.574/21. https://www.etui.org/sites/default/files/post-FDI-WEB.pdf (accessed 2023, November 4).
• Gallizo, J. L., & Salvador, M. (2002). What factors drive and which act as a brake on the convergence of financial statements in EMU member countries? Review of Accounting and Finance, 1(4), 49-68. https://doi.org/10.1108/eb026996
• Gallizo, J. L., Saladrigues, R., & Salvador, M. (2010). Financial convergence in transition economies: EU enlargement. Emerging Markets Finance and Trade, 46(3), 95-114. https://doi.org/10.2753/ree1540-496x460307
• Gugler, K., Mueller, D. C., & Peev, E. (2013). Determinants of ultimate control of large firms in transition countries: empirical evidence. Journal of Institutional and Theoretical Economics (JITE), 169 (2), 275 - 303. https://doi.org/ 10.1628/093245613X13626680790513
• Havrylyshyn, O., Meng, X., & Tupy, M.L. (2016). 25 years of reforms in ex-communist countries: fast and extensive reforms led to higher growth and more political freedom. Policy Analysis, 795, 1-32. https://ssrn.com/abstract=2833941
• Hernández, V., Nieto, M. J., & Rodríguez, A. (2022). Home country institutions and exports of firms in transition economies: Does innovation matter? Long Range Planning, 55 (1), 1-17. https://doi.org/10.1016/j.lrp.2021.102087
• Jakšić, S., Erjavec, N., & Cota, B. (2020). Export and total factor productivity of EU new member states. Croatian Operational Research Review, 11, 263-273. https://doi.org/10.17535/crorr.2020.0021
• Kafouros, M., & Aliyev, M. (2016). Institutional development and firm profitability in transition economies. Journal of World Business, 51 (3), 369-378. https://doi.org/10.1016/j.jwb.2015.06.002
• Kliestik, T., Valaskova, K., Lazaroiu, G., Kovacova, M., & Vrbka, J. (2020). Remaining financially healthy and competitive: the role of financial predictors. Journal of Competitiveness, 12(1), 74-92. https://doi.org/10.7441/joc.2020.01.05
• Krammer, S. M. S. (2015). Do good institutions enhance the effect of technological spillovers on productivity? Comparative evidence from developed and transition economies. Technological Forecasting and Social Change, 94, 133-154. https://doi.org/10.1016/j.techfore.2014.09.
• Kravtsova, V. (2007). Foreign presence and efficiency in transition economies. Journal of Productivity Analysis, 29(2), 91-102. https://doi.org/10.1007/s11123-007-0073-3
• Laitinen, E. (2018). Financial reporting: Long-term change of financial ratios. American Journal of Industrial and Business Management, 8, 1893-1927. https://doi.org/10.4236/ajibm.2018.89128.
• Lissowska, M. (2014). Welfare against growth gains in post-transition countries. What are the consequences for stability? Economics: The Open-Access, Open-Assessment E-Journal, 8, 2014-13. https://doi.org/10.5018/economics-ejournal.ja.2014-13
• Mihaljek, D. (2018). Convergence in Central and Eastern Europe: Can all get to EU average? Comparative Economic Studies, 60(2), 217-229. https://doi.org/10.1057/s41294-018-0063-7
• Nadar, D. S., & Wadhwa, B. (2019). Theoretical review of the role of financial ratios. https://ssrn.com/abstract=3472673 or http://doi.org/10.2139/ssrn.3472673
• Neimke, M. (2003). Financial development and economic growth in transition countries (IEE Working Paper No. 173). Ruhr-Universität Bochum, Institut für Entwicklungsforschung und Entwicklungspolitik (IEE). https://www.econstor.eu/bitstream/10419/183527/1/wp-173.pdf
• Nenovsky, N., & Tochkov, K. (2014). Transition, integration and catching up: Income convergence between Central and Eastern Europe and the European Union. Mondes en développement, 167, 73-92. https://doi.org/10.3917/med.167.0073
• Orbis. (2007). Internet user guide. Bureau van Dijk.
• Piesse, J., & Thirtle, C. (2000). A stochastic frontier approach to firm level efficiency, technological change, and productivity during the early transition in Hungary. Journal of Comparative Economics, 28 (3), 473-501. https://doi.org/10.1006/jcec.2000.1672
• Ranjbar, O., Chang, T., Lee, CC., & Elmi, Z.M. (2018). Catching-up process in the transition countries. Economic Change and Restructuring, 51(3), 249-278. https://doi.org/10.1007/s10644-017-9214-5
• Rusu, V. D., & Roman, A. (2018). An empirical analysis of factors affecting competitiveness of C.E.E. countries. Economic Research-Ekonomska istraživanja, 31(1), 2044-2059. https://doi.org/10.1080/1331677x.2018.1480969
• Serrano Cinca, C., Mar Molinero, C., & Gallizo Larraz, J. L. (2005). Country and size effects in financial ratios: A European perspective. Global Finance Journal, 16(1), 26-47. https://doi.org/10.1016/j.gfj.2005.05.003
• Stubelj, I., Dolenc, P., Biloslavo, R., Nahtigal, M., & Laporšek, S. (2017). Corporate purpose in a small post-transitional economy: the case of Slovenia. Economic Research-Ekonomska istraživanja, 30(1), 818-835. https://doi.org/10.1080/1331677X.2017.1311230
• Suthar, K.U. (2018). Financial ratio analysis: A theoretical study. International Journal of Research in all Subjects in Multi Languages, 6(3), 61-64. https://www.raijmr.com/ijrsml/wp-content/up-loads/2018/06/IJRSML_2018_vol06_issue_3_Eng_09.pdf
• Svejnar, J. (2002). Transition economies: performance and challenges. Journal of Economic Perspectives, 16(1), 3-28. https://doi.org/10.1257/0895330027058
• Vitezić, N. (2005). Does privatization in transitional countries influence enterprise efficiency growth: a case of Croatia and Slovenia. International Business & Economics Research Journal, 4(2), 27-36. https://doi.org/10.19030/iber.v4i2.3571
• Volz, U. (2010). An empirical examination of firms' financing conditions in transition countries. International Journal of Emerging and Transition Economies, 3 (2), 167-193. https://dergipark.org.tr/en/pub/deuijete/issue/4617/63003
• Vučković, M., Bobek, V., Maček, A., Skoko, H., & Horvat, T. (2020). Business environment and foreign direct investments: the case of selected European emerging economies. Ekonomska istraživanja, 33(1), 243-266. https://doi.org/10.1080/1331677X.2019.1710228.
• Żuk, P., Polgar, E.K., Savelin, L., del Hoyo J. L. D., & König, P. (2018). Real convergence in central, eastern and south-eastern Europe. ECB Economic Bulletin, 3. https://www.ecb.europa.eu/pub/pdf/other/ecb.ebart201803_01.en.pdf (accessed 2023, July 26).

Identyfikatory

DOI

10.5709/ce.1897-9254.523