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A Comparison Of The Financial Characteristics Of U.S. And European Manufacturing Firms

Author

Listed:
  • MERIC Gulser

    (Rowan University, Glassboro, New Jersey, USA)

  • BENTLEY T. Jerome

    (Rider University, Lawrenceville, New Jersey, USA)

  • McCALL W.Charles

    (Rider University, Lawrenceville, New Jersey, USA)

  • MERIC Ilhan

    (Rider University, Lawrenceville, New Jersey, USA)

Abstract

Comparing the financial characteristics of firms in different countries and regions has been a popular research topic in finance. In this paper, we compare the financial characteristics of U.S. and European manufacturing firms with the MANOVA (Multivariate Analysis of Variance) method and financial ratios. Our findings indicate that the overall financial characteristics of U.S. and European manufacturing firms are significantly different. We find that U.S. manufacturing firms are more profitable and they have less liquidity and bankruptcy risks compared with European manufacturing firms. European manufacturing firms are more efficient in managing their fixed assets. However, U.S. manufacturing firms are more efficient in managing their accounts receivable and total assets. U.S. manufacturing firms are able to achieve significantly higher sales and total assets growth rates compared with European manufacturing firms.

Suggested Citation

  • MERIC Gulser & BENTLEY T. Jerome & McCALL W.Charles & MERIC Ilhan, 2016. "A Comparison Of The Financial Characteristics Of U.S. And European Manufacturing Firms," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 11(2), pages 58-67, August.
  • Handle: RePEc:blg:journl:v:11:y:2016:i:2:p:58-67
    as

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    File URL: http://eccsf.ulbsibiu.ro/RePEc/blg/journl/11206meric&bentley&mccall&meric.pdf
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    References listed on IDEAS

    as
    1. Edmister, Robert O., 1972. "An Empirical Test of Financial Ratio Analysis for Small Business Failure Prediction," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 7(02), pages 1477-1493, March.
    2. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    3. John K. Wald, 1999. "How Firm Characteristics Affect Capital Structure: An International Comparison," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 22(2), pages 161-187, June.
    4. Wald, John K, 1999. "How Firm Characteristics Affect Capital Structure: An International Comparison," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 22(2), pages 161-187, Summer.
    5. Dambolena, Ismael G & Khoury, Sarkis J, 1980. " Ratio Stability and Corporate Failure," Journal of Finance, American Finance Association, vol. 35(4), pages 1017-1026, September.
    6. Stevens, Donald L., 1973. "Financial Characteristics of Merged Firms: A Multivariate Analysis," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 8(02), pages 149-158, March.
    7. repec:bla:joares:v:10:y:1972:i:1:p:167-179 is not listed on IDEAS
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