Impact of Macroeconomic Variables on the Components of Financial Statements of Latin American Public Companies

Abstract

This study (i) measures the causal relationship between macroeconomic indicators and the financial statements of Latin American public companies, (ii) and determines the relationship between components of financial statements of Latin American public companies and their respective lagged variables. To carry out the study, estimates GMM of Arellano and Bond and GMM System were adopted, with secondary data extracted from Thomson Reuters Eikon and Word Bank. From the estimates, which had a sample of 150 companies, identified the causal relationships (i) of the Exchange Rate in Total Assets, Net Revenue and Equity, (ii) of the GDP in Equity and Net Income, (iii) and Net Income with its first lag. Thus, this research advances the literature by demonstrating the influence of macroeconomics, in a different way, on the components of financial statements.