Determinants factors of the performance of metallurgical companies in Northern Portugal: new evidence using panel data

Abstract

PurposeThe main goal of this paper is to study the specific characteristics of the performance of companies in the metallurgical sector, in the northern region of Portugal.Design/methodology/approachTo achieve this aim, the authors have used data from 325 companies manufacturing metal products, except machinery and equipment (CAE Rev.3 25) and 27 companies that manufacture machinery and equipment (CAE Rev. 3 28). The models were estimated by using the panel data methodology for the period between 2011 and 2019. Specifically, the estimation method of the generalized method of moments system (GMM system) proposed by Arellano and Bover (1995) and Blundell and Bond (1998) was used.FindingsThe results show that the main decisions on the performance of metallurgical companies in Northern Portugal depend on the dimensions of sales in the domestic market (SDM), sales in the community market (SCM), and sales in the foreign market (SFM) and also highlight that the signal and significance of the specific variables depends on how the different stakeholders understand performance.Originality/valueAs far as the authors know, this is the first study to comparatively analyze the two metallurgical databases in Portugal. Despite the huge difference in the size of the sample, this study’s results show that in an era of paradigm shift about what business objectives should be, stakeholders are still not environmentally aware and the social dimension is only considered by shareholders, but not yet by the manager and the general community.

Performance drivers in Iberian companies in different economic cycles: new evidence using panel data

“…Regarding the lagged dependent variable, it is possible to understand that the ROA of the previous year positively affects the ROA of the current year. This result suggests that the vast number of stakeholders attentive to the performance of companies believe that for a company to be sustainable, it will have to maintain adequate levels of profitability (Neves et al , 2022a, for a Portuguese sample of 325 metallurgical companies). Regarding the EBIT margin, it appears that the manager in this period is not optimistic that he will be able to maintain the same margins from year to year, probably due to some unrest in the market (Neves et al , 2022a).…”