Determinants of Portuguese firms’ financial performance: panel data evidence

Elisabete Simões Vieira (GOVCOPP Unit Research, ISCA-UA, University of Aveiro, Aveiro, Portugal)
Maria Elisabete Neves (Coimbra Business School, ISCAC, Instituto Politecnico de Coimbra, Coimbra, Portugal) (Centre for Transdisciplinary Development Studies, University of Trás-os-Montes and Alto Douro, Vila Real, Portugal)
António Gomes Dias (Centre for Transdisciplinary Development Studies, University of Trás-os-Montes and Alto Douro, Vila Real, Portugal)

International Journal of Productivity and Performance Management

ISSN: 1741-0401

Publication date: 19 June 2019

Abstract

Purpose

The purpose of this paper is to analyse the determinants of Portuguese firms’ performance.

Design/methodology/approach

To achieve this aim, the authors used data from 37 non-financial firms in the period between 2010 and 2015. Three dependent variables were tested and the estimation of the model using the Generalised Method of Moments shows that internal, external and institutional factors are important to explain the performance of firms listed in Euronext Lisbon.

Findings

The determinants of firm performance vary depending on the variable used to measure the performance. Specifically, the results show that when the authors use a market variable of performance, the firm-specific variables are not so important to explain performance. The macroeconomic factors, including the investor’s sentiment and insider ownership, more effectively explain the firm’s performance. The evidence suggests that the determinants of firm performance change according to the way in which different stakeholders appreciate firm performance.

Originality/value

The main contribution of such approach is to show that internal and external factors influence performance measures in distinct ways, thus helping managers who are expected to make decisions according to the investors’ expectations. It provides initial guidelines for policy makers to understand how to improve the performance of their firms using firm-specific factors. Additionally, this work also demonstrates that the firm’s characteristics, macroeconomics and governance factors could affect the Portuguese firms’ performance, conveying a valuable contribution for investors.

Keywords

Citation

Vieira, E., Neves, M. and Dias, A. (2019), "Determinants of Portuguese firms’ financial performance: panel data evidence", International Journal of Productivity and Performance Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJPPM-06-2018-0210

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Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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