The impact of crude oil price, firm size, and risk-taking behavior on accounting profits and market performance

Tessa Yudhistira, Dewi Hanggraeni

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

This research aims to investigate and assess the influence of crude oil price volatility on firms' accounting profits (measured by return on assets [ROA], return on equity [ROE], and net profit margin [NPM]) and market performance (indicated by stock returns). Additionally, this research investigates if a size of a firm, risk-taking behavior, global financial crisis, and oil price crash play a role in a company's accounting profits and market performance. This research is conducted using a multiple regression model with panel data with the profitability ratios (ROA, ROE, and NPM) as dependent variables and oil price, firm size, risk-taking behavior, global financial crisis, and oil price crash as independent variables. Data are gathered from 41 samples of listed oil and gas companies in Southeast Asia and Australia and divided into exploration and production and non-exploration and production companies to obtain objective results. This research reveals that oil price, risk-taking behavior, firm size, global financial crisis, and oil price crash significantly influence accounting profits and market performance, with mixed relationships individually. The results of this research will provide a meaningful contribution for researchers assessing determinant factors on accounting profits and market performance of oil and gas companies.

Original languageEnglish
Title of host publicationBusiness and Management Issues in the Global and Digital Era
Subtitle of host publicationIndonesian Perspectives
PublisherNova Science Publishers, Inc.
Pages155-171
Number of pages17
ISBN (Electronic)9781536165302
ISBN (Print)9781536162752
Publication statusPublished - 11 Nov 2019

Keywords

  • Accounting profits
  • Firm size
  • Oil and gas companies
  • Oil price
  • Risk-taking
  • Stock returns

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