Performance drivers in Iberian companies in different economic cycles: new evidence using panel data

Abstract

Purpose This study aims to understand which factors determine the corporate performance of Portuguese and Spanish listed companies between 2011 and 2018, also considering the sub-period marked by the presence of the Troika in Portugal, between 2011 and 2014. Design/methodology/approach To achieve this aim, panel data methodology was used, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bond (1991), Arellano and Bover (1995) and Blundell and Bond (1998) for 110 non-financial companies from the Iberian Peninsula. Findings The results point out different signs and significance of the variables in the companies of the two countries. Regarding the sub-period, our results suggest that the intervention of the Troika in Portugal acted in a very different way from the neighboring country. Originality/value This research shows the importance of studying countries individually, even with small dimensions, to reinforce the path that is still necessary for more sustainable companies. Furthermore, when companies have strong governance structures, the harmful contagion from one neighboring country to another may not happen.