THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCE

The paper assesses the impact of the financial architecture on the performance of European retail companies. An approach based on a comprehensive analysis of the effects of the financial architecture components is used. The hypotheses are tested using data on public European retailers listed on the...

Full description

Bibliographic Details
Main Authors: V. V. Nazarova, S. P. Glebov
Format: Article
Language:Russian
Published: Government of the Russian Federation, Financial University 2017-09-01
Series:Финансы: теория и практика
Subjects:
Online Access:https://financetp.fa.ru/jour/article/view/9
_version_ 1826565364278886400
author V. V. Nazarova
S. P. Glebov
author_facet V. V. Nazarova
S. P. Glebov
author_sort V. V. Nazarova
collection DOAJ
description The paper assesses the impact of the financial architecture on the performance of European retail companies. An approach based on a comprehensive analysis of the effects of the financial architecture components is used. The hypotheses are tested using data on public European retailers listed on the London Stock Exchange in 2004 to 2015. To substantiate the interrelationship between the financial architecture and the company performance indicators, the following metrics are analyzed in the paper: the return on assets ratio (ROA) reflecting the ROA in aggregate; the Tobin Q reflecting the investment attractiveness of the company; the strategic performance indicator expressed through the EVA (economic value-added) index reflecting the company’s economic profit (with account for the weighted average cost of capital definition). To simulate the impact of the financial architecture on the company performance, the panel regression method was used making it possible to increase the number of observations, minimize the collinearity between explanatory variables and increase the effectiveness of the estimates obtained. In order to get application insights, two models were constructed: a model with fixed effects taking into account additional characteristics of the company and a model with random effects to minimize the shortcomings of the first model. The analysis shows that the financial architecture of retail companies impacts their strategic performance expressed through the EVA index and performance expressed by the Tobin criterion but has no effect on such performance key figure as ROA. As a result of the research, the performance determinants of large European retailers were identified and a strategic performance model based on the concept of the financial architecture was implemented.
first_indexed 2024-04-10T02:38:04Z
format Article
id doaj.art-9478cc09656043c0b53cd5bd7091fce7
institution Directory Open Access Journal
issn 2587-5671
2587-7089
language Russian
last_indexed 2025-03-14T10:34:35Z
publishDate 2017-09-01
publisher Government of the Russian Federation, Financial University
record_format Article
series Финансы: теория и практика
spelling doaj.art-9478cc09656043c0b53cd5bd7091fce72025-03-02T11:01:58ZrusGovernment of the Russian Federation, Financial UniversityФинансы: теория и практика2587-56712587-70892017-09-0121410011510.26794/2587-5671-2017-21-4-100-11546THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCEV. V. Nazarova0S. P. Glebov1St. Petersburg School of Economics and Management, National Research University “Higher School of Economics”.St. Petersburg School of Economics and Management, National Research University “Higher School of Economics”.The paper assesses the impact of the financial architecture on the performance of European retail companies. An approach based on a comprehensive analysis of the effects of the financial architecture components is used. The hypotheses are tested using data on public European retailers listed on the London Stock Exchange in 2004 to 2015. To substantiate the interrelationship between the financial architecture and the company performance indicators, the following metrics are analyzed in the paper: the return on assets ratio (ROA) reflecting the ROA in aggregate; the Tobin Q reflecting the investment attractiveness of the company; the strategic performance indicator expressed through the EVA (economic value-added) index reflecting the company’s economic profit (with account for the weighted average cost of capital definition). To simulate the impact of the financial architecture on the company performance, the panel regression method was used making it possible to increase the number of observations, minimize the collinearity between explanatory variables and increase the effectiveness of the estimates obtained. In order to get application insights, two models were constructed: a model with fixed effects taking into account additional characteristics of the company and a model with random effects to minimize the shortcomings of the first model. The analysis shows that the financial architecture of retail companies impacts their strategic performance expressed through the EVA index and performance expressed by the Tobin criterion but has no effect on such performance key figure as ROA. As a result of the research, the performance determinants of large European retailers were identified and a strategic performance model based on the concept of the financial architecture was implemented.https://financetp.fa.ru/jour/article/view/9evatobin q
spellingShingle V. V. Nazarova
S. P. Glebov
THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCE
Финансы: теория и практика
eva
tobin q
title THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCE
title_full THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCE
title_fullStr THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCE
title_full_unstemmed THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCE
title_short THE IMPACT OF FINANCIAL ARCHITECTURE ON THE EUROPEAN RETAIL COMPANY PERFORMANCE
title_sort impact of financial architecture on the european retail company performance
topic eva
tobin q
url https://financetp.fa.ru/jour/article/view/9
work_keys_str_mv AT vvnazarova theimpactoffinancialarchitectureontheeuropeanretailcompanyperformance
AT spglebov theimpactoffinancialarchitectureontheeuropeanretailcompanyperformance
AT vvnazarova impactoffinancialarchitectureontheeuropeanretailcompanyperformance
AT spglebov impactoffinancialarchitectureontheeuropeanretailcompanyperformance