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Financial accounting information plays an important role in assessing and forecasting firms’ financial performance. But besides that, there are other external factors affecting the performance of firms, such as economic and financial crises, which cause imbalances over the economy and affects the business environment. Thus, based on financial statements data, in this paper, the determinants of financial performance are examined, and the impact of a financial crisis on these factors is analyzed, using the fixed and random effects panel estimators. A sample of non-financial firms from European countries considering annual data for the period of 2006 to 2015 was used for this research. The results achieved by panel data analysis show that a crisis exerts a significant positive effect over financial performance as well as liquidity, assets turnover, and labor productivity, meaning that firms tend to put in greater efforts to maintain financial performance in the face of a crisis. Financial performance is significantly and negatively influenced by leverage independently of the crisis effect, showing return on assets to be lower than the average interest rate.


This paper examines the credit risk and capital adequacy of the 567 rural banks in the Philippines to investigate how both variables affect bank profitability. Using the Arellano-Bond estimator, we found out that credit risk has a negative and statistically significant relationship with profitability. However, empirical analysis showed that capital adequacy has no significant impact on the profitability of rural banks in the Philippines. It is therefore necessary for the rural banks to examine more deeply if capital infusion would result in higher profitability than increasing debts. The study also implies that it is imperative for the banks to understand which risk factors have greater impact on their financial performance and use better risk-adjusted performance measurement to support their strategies. Rural banks should establish credit risk management that defines the process from initiation to approval of loans, taking into consideration the sound credit risk management practices issued by regulatory bodies. Moreover, rural banks need to enhance internal control measures to ensure the strict implementation of internal processes on lending operations.

Do macroeconomic factors matter for stock returns? Evidence from estimating a multifactor model on the Croatian market

Factor models observe the sensitivity of an asset return as a function of one or more factors. This paper analyzes returns on fourteen stocks of the Croatian capital market in the period from January 2004 to October 2009 using inflation, industrial production, interest rates, market index and oil prices as factors. Both the direction and strength of the relation between the change in factors and returns are investigated. The analyses included fourteen stocks and their sensitivities to factors were estimated. The results show that the market index has the largest statistical significance for all stocks and a positive relation to returns. Interest rates, oil prices and industrial production also marked a positive relation to returns, while inflation had a negative influence. Furthermore, cross-sectional regression with the estimated sensitivities used as independent variables and returns in each month as dependent variables is performed. This analysis resulted in time series of risk premiums for each factor. The most important factor affecting stock prices proved to be the market index, which had a positive risk premium. A statistically significant factor in 2004 and 2008 was also inflation, marking a negative risk premium in 2004 and a positive one in 2008. The remaining three factors have not shown as significant.