<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The automotive industry is widely considered to be crucial for the economy, as it reflects economic development in general. Despite interest in financial performance, few studies have considered paying attention to the ownership structure among stockholders. Hence, the study aims to find out how the degree of ownership concentration, measured through the independence indicator of the Bureau van Dijk, is reflected in the financial management of companies in the automotive industry among selected European countries. The generalized method of moments (GMM) technique is widely used while investigating panel data with a short estimating period, i.e. nine years annually in this case. However, this study reveals that, without deploying techniques, subsequently introduced a modified version of GMM estimators with panel data by providing an implementation using Stata statistical software. Otherwise, these particular econometric tools to analyze a dynamic panel can often give false significant estimates. Overall, liquidity seems to be significant in the case of firms with less concentrated ownership, whereas companies with a major owner are affected more by selected macroeconomic variables.</p>
</abstract>

The automotive industry is widely considered to be crucial for the economy, as it reflects economic development in general. Despite interest in financial performance, few studies have considered paying attention to the ownership structure among stockholders. Hence, the study aims to find out how the degree of ownership concentration, measured through the independence indicator of the Bureau van Dijk, is reflected in the financial management of companies in the automotive industry among selected European countries. The generalized method of moments (GMM) technique is widely used while investigating panel data with a short estimating period, i.e. nine years annually in this case. However, this study reveals that, without deploying techniques, subsequently introduced a modified version of GMM estimators with panel data by providing an implementation using Stata statistical software. Otherwise, these particular econometric tools to analyze a dynamic panel can often give false significant estimates. Overall, liquidity seems to be significant in the case of firms with less concentrated ownership, whereas companies with a major owner are affected more by selected macroeconomic variables.

Financial Performance Among Top10 Automotive Leaders in the EU: Essential Techniques to Investigate the Structure of Moments While Using the GMM with Dynamic Panel Data

Department of Finance and Accounting, School of Business Administration

Studia Universitatis „Vasile Goldis” Arad – Economics Series

This work is licensed under the Creative Commons Attribution 4.0 International License.

The automotive industry is widely considered to be crucial for the economy, as it reflects economic development in general. Despite interest in financial...

Financial Performance Among Top10 Automotive Leaders in the EU: Essential Techniques to Investigate the Structure of Moments While Using the GMM with Dynamic Panel Data

Published Online: Jul 13, 2024

Page range: 26 - 59

Received: Aug 01, 2023

Accepted: Nov 01, 2023

DOI: https://doi.org/10.2478/sues-2024-0012

Keywords
Financial Performance, Ownership structure, EU automotive industry, Dynamic panel estimation

© 2024 Tomáš Heryán et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Financial Performance Among Top10 Automotive Leaders in the EU: Essential Techniques to Investigate the Structure of Moments While Using the GMM with Dynamic Panel Data

Published Online: Jul 13, 2024

Page range: 26 - 59

Received: Aug 01, 2023

Accepted: Nov 01, 2023

DOI: https://doi.org/10.2478/sues-2024-0012

KeywordsFinancial Performance, Ownership structure, EU automotive industry, Dynamic panel estimation

© 2024 Tomáš Heryán et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
Financial Performance, Ownership structure, EU automotive industry, Dynamic panel estimation