Assessment of Influence of External Factors on Financial Stability of Construction Companies

Аннотация

When Russian construction companies switch to project financing they face a number of problems which have a negative impact on their operations. While a company is able to influence internal factors (such as resources, capital, their utilization efficiency etc.) it is virtually impossible to control external factors (inflation, unemployment, government policy etc.). These factors make a company less stable financially. One of manifestations of financial stability is resistance to external environmental disturbances. External factors influence corporate financial stability, they are mortgage rate, price increase index etc. Defining the extent of influence of external factors will help to mitigate the impact of external environment, alleviate the consequences. This makes the topic of the research relevant and increases the significance of analysis of external factors which influence corporate operations.

In this paper we conducted content analysis of the financial stability definition; evaluated financial stability of 50 construction companies of the Siberian Federal District; selected statistical information by constituent entities of the Siberian Federal District which influences construction companies’ operations; assessed influence of the selected factors on financial stability of construction companies applying the binary choice model (logit model). The research showed that mortgage rate, consumer price index and nominal average salary influence construction companies of the Siberian Federal District. If influence of these factors is taken into consideration when planning and managing construction companies’ resources they will be able to resist the impact of external environment and improve their financial stability.