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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
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    References listed on IDEAS

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    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

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