Drivers of Equity as a Performance Measure. A Dynamic Panel Data Analysis for Russian Firms
Drivers of Equity as a Performance Measure. A Dynamic Panel Data Analysis for Russian Firms

Summary/Abstract: The purpose of this study is to find whether equity can be a performance indicator, since it is usually considered mostly as an input by investors and other interested parties. The study using empirical data tests the dynamics of equity for 201 unlisted Russian firms for the 2000 to 2015 period. A dynamic panel data analysis using GMM as proposed in Arellano and Bond (1991) is performed. The study finds that equity evolution is affected by lagged itself. The general adjustment process was quite slowly and results were affected by 2008 financial crisis. Some industries were closer to the target equity financing than others. Also, the firms’ characteristics are confirmed to be drivers of equity financing. The study provides empirical results which can be used for methodological purpose, as well as for managers/specialists in view of improving and adjusting company financing policies.

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