Accounting Determinants of Systematic Risk in Euro Area Manufacturing Industry

This paper aims to analyze the relationship between systematic risk and financial-economic variables for listed manufacturing companies that are part of the Euro Area. The study analyses how certain accounting variables impact systematic risk. The sample includes 635 listed companies. The variables are size, efficiency, profitability, liquidity and financial structure. The analysis is based on equity beta. The application of multiple linear least squares regression reveals a statistically significant negative relation between systematic risk and the ratio of equity funds to total liabilities, the EBITDA margin and the ROE. These findings have practical implications for both investors and companies and are consistent with previous studies. An increased equity base serves to enhance the company's overall financial stability, while greater operational efficiency and higher profitability contribute to strengthening the company and reduce systematic risk.