Document Type

Article

Version Deposited

Published Version

Publication Date

5-2014

Publication Title

The International Journal of Business and Finance Research

Abstract

The U.S. and Germany rank #1 and #3, respectively, in the world, in terms of the total amount of international trade. U.S. and German firms compete with one another for a larger market share in other countries and in each other’s local markets. And yet, there are no published studies that compare the financial management practices of U.S. and German firms. In this paper, we make a contribution to the finance literature on this subject by comparing the financial characteristics of U.S. and German manufacturing firms. Our findings provide valuable insights for corporate financial managers and for investors who invest in these countries. Using a sample of 1166 firms, we find that the financial characteristics of U.S. manufacturing firms differ significantly from those of German manufacturing firms. MANOVA test results indicate that U.S. firms exhibit higher liquidity, lower debt, higher profitability, and lower total assets turnover. These findings are also supported by the logistic regression results. We suggest that better financial performance of U.S. firms could be attributed to more business-friendly employment laws and lower levels of unionization in the United States.

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With this email, we grant Campbell Library, Rowan University permission to permanently add articles published by its faculty members in any of the Institute for Business and Finance Research journals to institutional repository, Rowan Digital Works, only and for non-profit use only. Deposit of such work must occur after publication with full citation.

Published Citation

Folkinshteyn, D., Uygur, O., & Meric, G. (2014). A comparison of the financial characteristics of U.S. and German manufacturing firms. International Journal of Business and Finance Research, 8(5), 9-22.

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