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DuPont analysis among European dentistry companies to measure the impact of the COVID-19 pandemic

Author

Listed:
  • Tomas Heryan

    (Silesian University in Opava)

  • Karin Gajdova

    (Silesian University in Opava)

Abstract

Although health economics belongs to the highly respected economic disciplines within the research literature, there is a considerable gap related to the investigation of dentistry in particular, even after the global pandemic of COVID-19 disease. Fundamentally, the DuPont framework is a well-known complex analysis to evaluate companies from the point of view of financial performance. The investigation of the return on equity as a relation between the return on assets and the equity multiplier, simply called the leverage effect, is presented in this paper. Therefore, this study aims to estimate the effect of leverage and its changes due to the COVID-19 pandemic among dentistry companies in selected European countries with different healthcare insurance systems. This comparative investigation focused on the generalised method of moments with dynamic panel data from Orbis, the Bureau van Dijk financial database for 1,128 dentistry companies in nine European countries. Methodologically, concerning those post-estimation techniques to evaluate over- and underestimation of the models. It has been differentiating between companies with a high or low ownership concentration structure. The results have shown differences in the leverage effect during the pandemic, assuming that companies with a major owner increased their equity, while the debt leverage increased among those companies with dispersed ownership and vice versa. If economic theory states that debt financing is more effective for a company than using internal sources, it is apparently different in the case of dentistry during the pandemic. However, dispersed ownership is more often related to dentistry, according to mergers in this particular business industry.

Suggested Citation

  • Tomas Heryan & Karin Gajdova, 2024. "DuPont analysis among European dentistry companies to measure the impact of the COVID-19 pandemic," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 27(1), pages 161-174, March.
    • Handle: RePEc:bbl:journl:v:27:y:2024:i:1:p:161-174
    DOI: 10.15240/tul/001/2024-1-010
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    References listed on IDEAS

    as
    1. Frank Windmeijer, 2018. "Testing Over- and Underidentification in Linear Models, with Applications to Dynamic Panel Data and Asset-Pricing Models," Bristol Economics Discussion Papers 18/696, School of Economics, University of Bristol, UK.
    2. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    3. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
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    More about this item

    Keywords

    Financial performance; debt leverage; health economics; healthcare systems; concentration of ownership structure;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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