Title: Research on the correlation between corporate financial performance and strategic risk based on panel data model

Authors: Su Guo; Junfu Cui; Taile Zhang

Addresses: School of Economy, Shandong Women's University, Jinan 250300, China ' School of Economy, Shandong Women's University, Jinan 250300, China ' School of Economy, Shandong Women's University, Jinan 250300, China

Abstract: In recent years, the trend of economic globalisation and multilateral trade has expanded rapidly, and the risk issues related to enterprises have received widespread attention. For this problem of the panel data model, the research uses the entropy theory of ordinal space to quantify the strategic risk of the enterprise, and constructs a panel-PLS estimation model to analyse the financial correlation of the enterprise. The results show that in most industries, the difference between the entropy value of rising and falling in the ranking of enterprises is 0.008, which is in a relatively stable state. Corporate strategic risk is negatively correlated with ROE and total asset turnover, and positively correlated with non-current asset turnover and dividend payout ratio. The above results can be used to predict the risk situation of the enterprise strategy and arrange targeted management decisions, which can promote the long-term development of the enterprise.

Keywords: strategic risk; financial performance; ordinal space; panel data model; PLS.

DOI: 10.1504/IJBIDM.2024.140238

International Journal of Business Intelligence and Data Mining, 2024 Vol.25 No.2, pp.168 - 183

Received: 16 Aug 2022
Accepted: 19 Sep 2023
Published online: 31 Jul 2024 *

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