GLOBAL CRISIS EFECTS ON FINANCIAL POSITION AND BUSINESS EFFICIENCY OF B&H’S INDUSTRIAL COMPANIES
GLOBAL CRISIS EFECTS ON FINANCIAL POSITION AND BUSINESS EFFICIENCY OF B&H’S INDUSTRIAL COMPANIES

Summary/Abstract: The aim of this paper was to assess effects of financial- economic crisis on financial health of B&H industrial firms. It also assesses empirically, whether prior cross-firm heterogeneity can explain differences in firm performance in three industrial sectors during the crisis that began in autumn 2008. The scope of the study consist of 68 manufacturing, energy and mining firms, all of which are processed in two B&H Stock Exchanges. In order to analyze the data of investigation, both parametric and nonparametric statistical models and linear regression model are used. Results based on comparing two sample periods reveals that there is significant difference between almost all performance ratios. The findings also indicated that the prior firm characteristics can have diverging effects on how firms are treated by the crisis. In general, less performing firms experience worse performance during a crisis. At the sectors level, findings show that the overall impact of the crisis is more harmful to smaller ones and less performing firms, especially those in manufacturing sector. Finally, the study concluded, that is in the company’s best interest to reorganize properly in order to prevent a similar financial outcomes in the future. Point in that, companies should making more room for improving business efficiency, primarily through better use of raw materials and energy, improving quality of output or undertaking strategic joint ventures.

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