Influence of Macroeconomic Factors on Financial Liquidity of Companies: Evidence from Poland

Abstract

The objective of this study is to examine the relationship between macroeconomic variables and the financial liquidity of companies. In this context, two main research questions were formulated. Firstly, which macroeconomic variables impact the financial liquidity of companies? Secondly, what is the direction and strength of the influence of these macroeconomic variables on the financial liquidity of companies? This study employed panel data analysis conducted on an unbalanced panel of 5327 Polish enterprises over the period 2003–2021. The primary research method employed was linear regression (pooled OLS) with robust standard errors clustered at the firm level. The main results of this study indicate that (1) the majority of macroeconomic variables, which illustrate the overall efficiency of the economic system (GDP per capita, ratio of foreign trade goods balance to GDP, CPI, and money supply), demonstrate a positive relationship with corporate liquidity; only the consumption-to-GDP ratio exhibits a negative relationship; (2) a positive relationship was observed between the number of building permits for housing and financial liquidity; (3) variables from the informal institutional environment indicate a positive relationship for the employment rate and a negative relationship for the share of the pre-working age population in the overall population; (4) the relationship between the ratio of internal expenditures on research and development to GDP and corporate liquidity is positive. This study addresses limitations of previous research by examining the impact of macroeconomic factors, particularly those from the institutional and technical environment, on corporate financial liquidity.