How do Pre-slowdown Financial Characteristics Impact the Firms’ Relative Financial Performance during Economic Recession? An Empirical Investigation

Abstract

In this era of globalisation and worldwide integration, the entire world is treated as one nation, without any geographical boundaries and hence, we are no more immune to the events happening outside our country ( Suresh, 2009 ). While the subprime crisis emanated in the US, but because of globalisation its adverse impact travelled deep around the globe, triggering economic recession and uncertainty in the global economy ( Kolasa, Rubaszek & Taglioni, 2009 ). The latest recession has affected Indian economy and its corporate sector to a great extent. Therefore, there is a sharp need to examine what characteristics did companies exhibit that made them more (or less) vulnerable to recession. In this light, the present article is an unpretentious attempt to examine the impact of firms’ pre-slowdown characteristics on firms’ relative financial performance between slowdown period and pre-slowdown period.