Abstract
How firms perform during the business cycle and what macroeconomic factors have the greatest influence on industrial firm performance? The purpose of this study is to study the impact of chosen macroeconomic factors on firm performance in the United Kingdom. To investigate effects of macroeconomic factors, panel data with instrumental variables were used between the period of 2000 and 2014 for top 100 firms in UK. As a result of the analysis, gross domestic product, inflation rate, and the rate of domestic debt interest payments to total income tax have a direct positive impact on firm performance. On the other hand, exchange rate, interest rate and the rate of short term foreign debts to central bank international reserves have an inverse impact.
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