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Country and industry factors as determinants of corporate financial liquidity in the European Union countries


  • Julia Koralun-Bereźnicka

    () (University of Gdansk, Faculty of Management, Department of the Corporate Finance)


Financial liquidity is considered as one of the most important features of corporate performance. This study is meant to verify whether the short-term solvency depends more on the specific features of the country, where an enterprise operates, or whether it is more heavily influenced by the industrial factors. The relative importance of the industry and country effect in financial liquidity ratios is evaluated with the use of multivariate statistical methods, involving mainly cluster analysis. The study involves 13 industries in 10 European Union countries, including Poland in the period 1999–2005. The study is based on the harmonised and aggregated financial reports from the European Commission BACH database. Findings provide empirical evidence that industrial factors constitute a more important determinant of corporate financial liquidity than country-specific factors. The results of the analysis may be useful for optimising investment diversification strategies.

Suggested Citation

  • Julia Koralun-Bereźnicka, 2011. "Country and industry factors as determinants of corporate financial liquidity in the European Union countries," Bank i Kredyt, Narodowy Bank Polski, vol. 42(1), pages 19-48.
  • Handle: RePEc:nbp:nbpbik:v:42:y:2011:i:1:p:19-48

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    More about this item


    industry effect; country effect; financial liquidity;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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