How does the effect of external financing on profitability differ across tiers? Evidence from the automotive supply chain

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dc.contributor.authorToušek, Zdeněk
dc.contributor.authorHinke, Jana
dc.contributor.authorGregor, Barbora
dc.contributor.authorProkop, Martin
dc.contributor.otherEkonomická fakultacs
dc.date.accessioned2023-06-01T08:01:10Z
dc.date.available2023-06-01T08:01:10Z
dc.description.abstractDue to the importance of automotive industry for the Czech Republic (in a broader sense for European countries) and due to the unprecedented development of both national and European economies caused by the COVID-19 outbreak, also having implications on the financial sector, we aim to explore the main determinants of operating performance within the automotive supply chain. This study is based on the data sample composed of complete individual financial statements (audited if available) of firms conducting their business in the Czech Republic from 2011 to 2018 and belonging to the automotive supply chain. This supply chain is defined as (sub) deliveries of the Czech automotive industry represented mainly by companies classified under NACE 22, 27, 25, 24. The hypothesis claiming that the investment and leverage-based variables are the important drivers of operating profitability was only partly confirmed (valid predominantly for Tier 3), which shows that the supply chain organization also plays a crucial role as well as (valid for Tier 1). Also, we have shown (illustrated) that the assumption of different capital structures among tiers is valid. The average overall indebtedness of Tier 3 is higher by approximately 50% (altogether, the short- and long-term leverage are higher by 40% and 62% respectively) than Tier 1 firms. The need for relatively high capital expenditures (applicable to Tier 1) and working capital investments (applicable to Tier 3) is partly facilitated by external funds reflected in the indebtedness, which is associated with the costs reducing overall low profits from these investments. The leverageprofitability relationship seems to be nonlinear for long-term debts contrary to short-term debts where the linear relationship prevails.en
dc.formattext
dc.identifier.doi10.15240/tul/001/2023-2-007
dc.identifier.eissn2336-5604
dc.identifier.issn1212-3609
dc.identifier.urihttps://dspace.tul.cz/handle/15240/172159
dc.language.isoen
dc.publisherTechnická Univerzita v Libercics
dc.publisherTechnical university of Liberec, Czech Republicen
dc.publisher.abbreviationTUL
dc.relation.ispartofEkonomie a Managementcs
dc.relation.ispartofEconomics and Managementen
dc.relation.isrefereedtrue
dc.rightsCC BY-NC
dc.subjectAutomotive supply chainen
dc.subjectcar manufacturingen
dc.subjectexternal financingen
dc.subjectprofitabilityen
dc.subject.classificationM21
dc.subject.classificationO12
dc.titleHow does the effect of external financing on profitability differ across tiers? Evidence from the automotive supply chainen
dc.typeArticleen
local.accessopen
local.citation.epage121
local.citation.spage105
local.facultyFaculty of Economics
local.filenameEM_2_2023_7
local.fulltextyes
local.relation.abbreviationE+Mcs
local.relation.abbreviationE&Men
local.relation.issue2
local.relation.volume26
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