Which factors drive the financial performance of construction companies: The evidence from the Czech Republic and Poland from 2009 to 2013

Purpose of the article The article deals with the identification of the quantitative factors that affect the performance of Czech and Polish construction companies, both in negative and positive way. Methodology/methods The financial performance of a company was analysed in terms of return on equity (ROE). To identify the factors influencing ROE, the method of ROE decomposition was chosen. As the obtained results could be negatively influenced by the existence of outliers in the research sample, the winsorized mean method was used. The time period from 2009 till 2013 was analysed. Data were obtained from Amadeus database provided by Bureau Van Dijk. Scientific aim The aim of the article is to identify indicators affecting the performance of enterprises in the construction section in the Czech Republic and Poland. Moreover, to answer following questions: Is the performance of Czech and Polish construction companies driven by the same factors? Is the relative influence of these factors the same or different between these countries? Findings The results show that average performance of enterprises, measured in terms of ROE, was driven by a different set of factors in both countries. On the one hand the performance of polish companies was mainly driven by the factors of the relative interest cost and return on assets, on the other hand the performance of Czech companies was mainly influenced by the factor of indebtedness. Conclusions The research results identified the indicators affecting the performance of construction companies in the Czech Republic and Poland during the years 2009 - 2013, either in a positive or negative way.