The Financialization and Operating Performance of Non-financial Companies Listed on the Warsaw Stock Exchange
The Financialization and Operating Performance of Non-financial Companies Listed on the Warsaw Stock Exchange

Author(s): Błażej Socha, Dariusz Urban
Subject(s): Business Economy / Management, Economic history, Present Times (2010 - today), Financial Markets
Published by: Masarykova univerzita nakladatelství
Keywords: financialization; ratios of financialization; operating activity performance;
Summary/Abstract: This paper deals with the issue of financialization of companies. The financialization reflects the growing asymmetry between production and exchange processes, in particular regarding the financial component of the exchange process. This asymmetry was revealed along with gradual changes in the financial behavior of nonfinancial enterprises, banks and households. The indication of this transformation process has been increasing the profit generated through financial transactions instead of operating activities. The main goal of this article was to answer the question about the coefficient between the level of financialization and the operating performance of companies from Poland. The research sample consists of the listed non-financial companies and the research period covers 2011-2017. The authors used calculated on their own synthetic indicators of company financialization reflecting their financial as well as investment performance and financial indicators measuring operating activity performance. In order to achieve the research goal, a standard statistical analysis of results was performed and correlation coefficients were used to measure the strength and the direction of association that exists between the level of financialization and the operating performance of companies. The empirical findings suggest the existence of differences in terms of operating activity performance (e.g. EBITDA Margin, EBITDA/Total Assets, Assets Turnover, Revenue/Working Capital) among companies with different level of financialization. It also suggests that financialization reflecting investment performance interact with operating activity performance differently to financialization reflecting financial performance.

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