Gyorgy Andor, Tamas Toth

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The research is about the relationship between the non-financial firm characteristics and the financial progress around the global financial crisis in 2008-2009. Non-financial firm characteristics data of 218 non-listed Central and Eastern European companies come from a survey in 2006 which focused on the capital budgeting practices and other characteristics of firms – such as presence of Western management culture, firm size, and extent of management ownership. The most important financial indicators are followed up reflecting these firms’ financial progresses – sales, profit before tax, net income, earnings before interest and taxes, total assets, equity, debt, return on equity, return on assets and number of employees – from 2005 to 2012. To analyse firms’ sensibility to the 2008-2009 global financial crisis, differences of financial indicators between the pre-crisis (2005-2008) and post-crisis (2009-2012) periods are examined by the non-financial indicators.

Our results confirm that 1) firms using any accounting-based capital budgeting methods are less sensitive to the financial crisis; 2) small firms are more exposed to a volatile business environment than larger ones; and 3) firms with higher level of management ownership perform better in time of crisis than firms with lower level of management ownership.


capital budgeting practice; financial performance; Central and Eastern Europe; global financial crisis

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