<abstract xmlns="http://www.w3.org/1999/xhtml"><p> Comparing the financial characteristics of firms in different countries has been a popular research topic in finance. However, general financial characteristics of European and Asian manufacturing firms have never been compared. In this paper, we undertake such a study with the MANOVA (Multivariate Analysis of Variance) technique. Our research uses all European and Asian manufacturing firms included in the Research Insight/Global Vintage database at the end of 2015. Our findings may provide valuable insights for financial managers and global investors. We find that Asian firms tend to have less liquidity risk but more bankruptcy risk compared with European firms. European firms have more efficient accounts receivable management and higher fixed and total assets turnover rates. However, Asian firms have higher inventory turnover and sales growth rates. Return on equity is not significantly different in European and Asian firms. However, Asian firms have significantly higher net profit margin and return on assets compared with European firms. </p></abstract>

Comparing the financial characteristics of firms in different countries has been a popular research topic in finance. However, general financial characteristics of European and Asian manufacturing firms have never been compared. In this paper, we undertake such a study with the MANOVA (Multivariate Analysis of Variance) technique. Our research uses all European and Asian manufacturing firms included in the Research Insight/Global Vintage database at the end of 2015. Our findings may provide valuable insights for financial managers and global investors. We find that Asian firms tend to have less liquidity risk but more bankruptcy risk compared with European firms. European firms have more efficient accounts receivable management and higher fixed and total assets turnover rates. However, Asian firms have higher inventory turnover and sales growth rates. Return on equity is not significantly different in European and Asian firms. However, Asian firms have significantly higher net profit margin and return on assets compared with European firms.

A Comparison of the Financial Characteristics of European and Asian Manufacturing Firms

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Comparing the financial characteristics of firms in different countries has been a popular research topic in finance. However, general financial...

A Comparison of the Financial Characteristics of European and Asian Manufacturing Firms

Published Online: Mar 01, 2018

Page range: 112 - 125

DOI: https://doi.org/10.1515/sbe-2017-0040

Keywords
Financial ratios, European and Asian manufacturing firms, MANOVA (Multivariate Analysis of Variance)

© 2018

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

A Comparison of the Financial Characteristics of European and Asian Manufacturing Firms

Published Online: Mar 01, 2018

Page range: 112 - 125

DOI: https://doi.org/10.1515/sbe-2017-0040

KeywordsFinancial ratios, European and Asian manufacturing firms, MANOVA (Multivariate Analysis of Variance)

© 2018

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Financial ratios, European and Asian manufacturing firms, MANOVA (Multivariate Analysis of Variance)