IDEAS home Printed from https://ideas.repec.org/a/spr/decisn/v49y2022i1d10.1007_s40622-021-00296-4.html
   My bibliography  Save this article

Drivers’ estimation of the luxury companies

Author

Listed:
  • Varvara Nazarova

    (National Research University Higher School of Economics)

  • Golovina Olga

    (National Research University Higher School of Economics)

  • Volosatova Ksenia

    (National Research University Higher School of Economics)

  • Yarusova Ksenia

    (National Research University Higher School of Economics)

Abstract

One of the important financial issues for the public companies is how to achieve the most optimal way to maximize firm value and shareholder wealth in a competitive environment. Another problem is connected with the search for an efficient method of the evaluation of social media mood impact on companies’ values as it creates their image and reputation. The paper aims to investigate the impact of financial indicators and news related to enterprise on luxury companies’ performance. Luxury industry is chosen as an object of the study as it has a range of specifics, which can cause the changes in the variables’ effects. To accomplish the purpose of the research, the authors design fixed-effects regression models on a sample of 45 European, Asian and American luxury companies for the period 2010–2019 and conduct sentiment, correlation and Granger-causality analyses using the extracted Twitter data. The results show that net margin, return on investments, total revenue, earnings per share, current ratio and asset turnover have a significant positive effect on the luxury companies’ market capitalization, while total debt percentage of total equity influences negatively and significantly. The study also finds that participation in M&A and luxury companies’ location have a significant impact on their market capitalization. Various impacts within the specifics of luxury sectors are also established for the sample examined in this research. Furthermore, strong relationships between news background and companies’ performance are discovered.

Suggested Citation

  • Varvara Nazarova & Golovina Olga & Volosatova Ksenia & Yarusova Ksenia, 2022. "Drivers’ estimation of the luxury companies," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 49(1), pages 105-128, March.
    • Handle: RePEc:spr:decisn:v:49:y:2022:i:1:d:10.1007_s40622-021-00296-4
    DOI: 10.1007/s40622-021-00296-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40622-021-00296-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40622-021-00296-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sitti Murniati, 2016. "Effect of Capital Structure, Company Size and Profitability on the Stock Price of Food and Beverage Companies Listed on the Indonesia Stock Exchange," Information Management and Business Review, AMH International, vol. 8(1), pages 23-29.
    2. Seref Kalayci & Abdulmecit Karatas & Ali Coskun & Ayhan Kirtas, 2005. "Financial Ratio Classification and Sub-sector Discrimination of Manufacturing Firms Evidence from an Emerging Market," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 10(1), pages 103-125, Spring.
    3. Mohammad Ali Kohansal & Zahir Alimoradi & S. Mahdi Bohloul, 2013. "The impact of knowledge-sharing mechanisms on employee performance," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 14(3), pages 293-306.
    4. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3‐4), pages 573-588, April.
    5. Marc Deloof, 2003. "Does Working Capital Management Affect Profitability of Belgian Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(3-4), pages 573-588.
    6. Nurah Musa Allozi & Ghassan S. Obeidat, 2016. "The Relationship between the Stock Return and Financial Indicators (Profitability, Leverage): An Empirical Study on Manufacturing Companies Listed in Amman Stock Exchange," Journal of Social Sciences (COES&RJ-JSS), , vol. 5(3), pages 408-424, July.
    7. Subhash Chander & Priyanka Aggarwal, 2008. "Determinants of Corporate Profitability: An Empirical Study of Indian Drugs and Pharmaceutical Industry," Paradigm, , vol. 12(2), pages 51-61, July.
    8. Siti Ayu Lestari & Mursalim Armayah, 2016. "Profitability and Company Value: Empirical Study of Manufacture Companies in Indonesia Period 2009 - 2014," Information Management and Business Review, AMH International, vol. 8(3), pages 6-10.
    9. Milton Friedman, 2007. "The Social Responsibility of Business Is to Increase Its Profits," Springer Books, in: Walther Ch Zimmerli & Markus Holzinger & Klaus Richter (ed.), Corporate Ethics and Corporate Governance, pages 173-178, Springer.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sofie Balcaen & Sophie Manigart & Hubert Ooghe, 2011. "From distress to exit: determinants of the time to exit," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 407-446, August.
    2. Genesis Gyasi Sah & Judit Furedi-Fulop, 2022. "The Effects of Proper Inventory Management on the Profitability of SMEs," Technium Social Sciences Journal, Technium Science, vol. 32(1), pages 340-351, June.
    3. María Angélica Arbeláez & Alejandro Becerra & Francisco Fernández & David Forero, 2019. "El sector comercio en Colombia y el crédito de proveedores," Informes de Investigación 17610, Fedesarrollo.
    4. Naumoski Aleksandar, 2022. "Financial Policy and Companies’ Sustainable Growth," Economic Themes, Sciendo, vol. 60(3), pages 281-301, September.
    5. Malik, Zafar Ullah & Iqbal, Athar, 2012. "Affect of Working Capital Management on Firms Profitability in Sugar Industry of Pakistan," MPRA Paper 41436, University Library of Munich, Germany.
    6. Fan, Chenguang & Bae, Seongho & Liu, Yu, 2024. "Can FinTech transform corporate liquidity? Evidence from China," Innovation and Green Development, Elsevier, vol. 3(2).
    7. Mahdi Salehi & Reza Ghorbanzadeh, 2016. "The influence of firms' capital expenditure on firms' working capital management," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 11(3), pages 287-301.
    8. repec:fst:rfsisf:v:8:y:2023:i:14:p:68-83 is not listed on IDEAS
    9. Nida Shah, 2016. "The Impact of Working Capital Management on Firms Profitability in Different Business Cycles: Evidence from Pakistan," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(1), pages 58-70, March.
    10. Lawrence Mbuvi & Gregory Namusonge & Wycliffe Arani, 2016. "Factors Affecting Automation of Inventory Management in Micro, Small and Medium Enterprises: A Case Study of Kitui County," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(1), pages 15-27, January.
    11. Giorgio Calcagnini & Annalisa Ferrando & Germana Giombini, 2015. "Multiple market imperfections, firm profitability and investment," European Journal of Law and Economics, Springer, vol. 40(1), pages 95-120, August.
    12. Afrifa, Godfred & Tingbani, Ishmael, 2017. "Working Capital Management, Cash Flow and SMEs’ Performance," MPRA Paper 82894, University Library of Munich, Germany, revised Oct 2017.
    13. Jain Mayank & Malik Taniya & Malik Sakshi, 2023. "Deciphering Financial Health and Risk: Hierarchical Relationships and Interdependencies among Key Factors," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 11(1), pages 162-185, October.
    14. Zheng, Xiaotian & Zhou, Youcheng & Iqbal, Sajid, 2022. "Working capital management of SMEs in COVID-19: role of managerial personality traits and overconfidence behavior," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 439-451.
    15. Faris Nasif ALShubiri, 2011. "The Effect Of Working Capital Practices On Risk Management: Evidence From Jordan," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 5(1), pages 39-54.
    16. Liu, Guangqiang & Wang, Shenghua, 2023. "Digital transformation and trade credit provision: Evidence from China," Research in International Business and Finance, Elsevier, vol. 64(C).
    17. Małgotrzata B. Okręglicka, 2014. "The Economic Recession And Working Capital Management Of Companies In Poland," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 696-706.
    18. Kristi Dashi, 2018. "Financial Profitability of Firms and its Determining Factors. (Case of the trade sector, Vlore region, Albania)," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(4), pages 619-630, AUGUST.
    19. E. Chuke Nwude & Patricia Ukachi Allison & Comfort Amaka Nwude, 2021. "The relationship between working capital management and corporate returns of cement industry of emerging market," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3222-3235, July.
    20. N. Sureshkumar PP Narayanan & Farha Ghapar & Li Lian Chew & Veera Pandiyan Kaliani Sundram & Umahdevi Jayamani & Azlina Muhammad, 2024. "Optimizing Working Capital Management in Supply Chain Finance: A Multi-Dimensional Approach," Information Management and Business Review, AMH International, vol. 16(2), pages 44-52.
    21. Ahmed Mohamed Habib & Nahia Mourad, 2022. "Analyzing the Efficiency of Working Capital Management: a New Approach Based on DEA-Malmquist Technology," SN Operations Research Forum, Springer, vol. 3(3), pages 1-20, September.

    More about this item

    Keywords

    Companies’ performance; Market capitalization; Financial ratios; News background; Luxury industry;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:decisn:v:49:y:2022:i:1:d:10.1007_s40622-021-00296-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.