The Influence of Bank Credit on Financial Structure and Financial Return for the Romanian Companies Active in Car Parts Distribution

Abstract

In this research, we analyze the dependence between financial return (as a dependent, endogenous variable) and bank credit (the volume of bank credits and the cost of borrowed capital, both expressed as independent, exogenous variables), applicable to Romanian companies that deal in the wholesale trade sector of parts and accessories for motor vehicles. Using the 2008–2017 time series panel data model on companies in this sector, we conclude that there is a relatively modest link between financial performance and bank credit., thus illustrating that the main factors generating financial returns are asset rotation (long-term investment efficiency in income generation) as well as operational profitability margin. We also discuss the diagnosis of capital returns in the analyzed sector by decompiling it into margins, rotation and capital structure (DuPont) rates.