A Comparison of the Financial Characteristics of NAFTA and Latin American Manufacturing Firms

Authors

  • Gulser Meric Rowan University U.S.A.
  • Cengiz Haksever Professor of Decision Sciences College of Business Administration Rider University Lawrenceville, New Jersey 08648
  • J. Drew Procaccino Associate Professor of Information Systems College of Business Administration Rider University Lawrenceville, New Jersey 08648
  • Ilhan Meric Professor of Finance College of Business Administration Rider University Lawrenceville, New Jersey 08648

DOI:

https://doi.org/10.5195/emaj.2016.102

Keywords:

Financial ratios, NAFTA manufacturing firms, Latin American manufacturing firms, MANOVA (Multivariate Analysis of Variance)

Abstract

Comparing the financial characteristics of firms in different countries and different regions has been a popular research topic in finance. However, NAFTA and Latin American manufacturing firms have never been compared. In this paper, we undertake such a study with the MANOVA (Multivariate Analysis of Variance) method and with data drawn from the Research Insight/Global Vintage database in October 2015. Our findings indicate that NAFTA manufacturing firms have less liquidity risk, but more financial risk, compared with Latin American Manufacturing firms. NAFTA manufacturing firms have significantly higher returns on equity due to achieving higher returns on assets and using more financial leverage. Latin American manufacturing firms have more efficient inventory management. However, NAFTA manufacturing firms have more efficient accounts receivable management and total assets management.

Author Biography

Gulser Meric, Rowan University U.S.A.

Professor of Finance

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Published

2017-01-06

Issue

Vol. 6 No. 2 (2016)

Section

Articles

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