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Accounting Determinants of Systematic Risk in Euro Area Manufacturing Industry

Author

Listed:
  • Carmelo Intrisano
  • Anna Paola Micheli
  • Anna Maria Calce
  • Nicolò Giangrande

Abstract

This paper aims to analyze the relationship between systematic risk and financial-economic variables for listed manufacturing companies that are part of the Euro Area. The study analyses how certain accounting variables impact systematic risk. The sample includes 635 listed companies. The variables are size, efficiency, profitability, liquidity and financial structure. The analysis is based on equity beta. The application of multiple linear least squares regression reveals a statistically significant negative relation between systematic risk and the ratio of equity funds to total liabilities, the EBITDA margin and the ROE. These findings have practical implications for both investors and companies and are consistent with previous studies. An increased equity base serves to enhance the company's overall financial stability, while greater operational efficiency and higher profitability contribute to strengthening the company and reduce systematic risk.

Suggested Citation

  • Carmelo Intrisano & Anna Paola Micheli & Anna Maria Calce & Nicolò Giangrande, 2025. "Accounting Determinants of Systematic Risk in Euro Area Manufacturing Industry," International Journal of Business and Management, Canadian Center of Science and Education, vol. 20(1), pages 1-72, February.
    • Handle: RePEc:ibn:ijbmjn:v:20:y:2025:i:1:p:72
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    References listed on IDEAS

    as
    1. Hasan, Mostafa Monzur & Hossain, Mahmud & Cheung, Adrian (Wai-Kong) & Habib, Ahsan, 2015. "Corporate life cycle and cost of equity capital," Journal of Contemporary Accounting and Economics, Elsevier, vol. 11(1), pages 46-60.
    2. Gonedes, Nicholas J., 1973. "Evidence on the Information Content of Accounting Numbers: Accounting-based and Market-based Estimates of Systematic Risk," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 8(3), pages 407-443, June.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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