Panel data analysis applied in financial performance assessment

Elisabeta JABA, Professor Emeritus, PhD,
Alexandru Ioan Cuza University of Iasi, Romania
Ioan-Bogdan ROBU, Lecturer, PhD,
Alexandru Ioan Cuza University of Iasi, Romania
Christiana Brigitte BALAN, Associate Professor, PhD,
Alexandru Ioan Cuza University of Iasi, Romania


This paper aims to present the use of panel data analysis in order to assess the state and dynamics of financial performance of the companies listed on the Bucharest Stock Exchange under the influence of determinant factors. Financial performance may be assessed by means of return on equity – ROE. Its main determinant factors suggested by literature are return on assets – ROA and own or financial leverage (FL). This paper provides a theoretical background and applied panel data analysis of two case studies that use fixed and random-effects models (investigating the influence of ROE of previous period on ROE for the current period). The selection of one of the two types of models is based on the results obtained by applying the Hausman test. The study includes Romanian companies listed on Bucharest Stock Exchange (BSE) during 2006-2015 and uses balanced samples. The authors used SAS 9.2 for data processing.

Keywords: panel data analysis, financial performance, return on equity, return on assets, financial leverage
JEL Classification: C23, C58, G31, M41

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Romanian Statistical Review 2/2017