%0 Journal Article
%T Market Risk and Financial Performance of Non-Financial Companies Listed on the Moroccan Stock Exchange
%J Risks | An Open Access Journal from MDPI
%D 2019
%R https://doi.org/10.3390/risks7010020
%X This study examines the effect of market risk on the financial performance of 31 non-financial companies listed on the Casablanca Stock Exchange (CSE) over the period 2000¨C2016. We utilized three alternative variables to assess financial performance, namely, the return on assets, the return on equity and the profit margin. We used the degree of financial leverage, the book-to-market ratio, and the gearing ratio as the indicators of market risk. Then, we employed the pooled OLS model, the fixed effects model, the random effects model, the difference-GMM and the system-GMM models. The results show that the different measures of market risk have significant negative influences on the companiesĄ¯ financial performance. The elasticities are greater following the degree of financial leverage compared with the book-to-market ratio and the gearing ratio. In most cases, the firmĄ¯s age, the cash holdings ratio, the firmĄ¯s size, the debt-to-assets ratio, and the tangibility ratio have positive effects on financial performance, whereas the debt-to-income ratio and the stock turnover hurt the performance of these non-financial companies. Therefore, decision-makers and managers should mitigate market risk through appropriate strategies of risk management, such as derivatives and insurance techniques. View Full-Tex
%U https://www.mdpi.com/2227-9091/7/1/20