This study examines the impact of currency crises and selected macroeconomic factors on the financial performance of 95 listed companies operating in nine sectors in Egypt. The pooled ordinary least squares method is applied by estimating a model for each of the nine sectors using annual data for the period 2008–2019. A range of tests are undertaken to establish the validity of the models and the model results, including multicollinearity, unit root, and co-integration, to avoid spurious regressions. Using return on assets and stock prices as the measures of financial performance, estimates of the models suggest that currency crises positively impact exporting firms but have a negative impact on importing firms. Moreover, consumer confidence, employment, consumer spending, gross domestic product, inflation, money supply, and net domestic credit all positively impact financial performance. Meanwhile, the real interest rate has a negative impact on financial performance.

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The Impact of Currency Crises and Selected Macro Factors on Firms’ Financial Performance: The Case of Egypt

  • Ali Metwally,
  • John Adams

摘要

This study examines the impact of currency crises and selected macroeconomic factors on the financial performance of 95 listed companies operating in nine sectors in Egypt. The pooled ordinary least squares method is applied by estimating a model for each of the nine sectors using annual data for the period 2008–2019. A range of tests are undertaken to establish the validity of the models and the model results, including multicollinearity, unit root, and co-integration, to avoid spurious regressions. Using return on assets and stock prices as the measures of financial performance, estimates of the models suggest that currency crises positively impact exporting firms but have a negative impact on importing firms. Moreover, consumer confidence, employment, consumer spending, gross domestic product, inflation, money supply, and net domestic credit all positively impact financial performance. Meanwhile, the real interest rate has a negative impact on financial performance.