Abstract
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.
Highlights
When Russian construction companies switch to project financing they face a number of problems which have a negative impact on their operations
The definitions considered above take into account the company internal state, its solvency, resource and capital management, external environment in which it operates, resistance to external factors but at the same time the considered definitions of financial stability fail to take into account efficient management of corporate resources which over the long term manifests itself in corporate profit and capital growth, in enhancement of financial stability
Reviving the question of whether external factors influence financial stability of companies we would like to emphasize that the answer is obviously positive
Summary
When Russian construction companies switch to project financing they face a number of problems which have a negative impact on their operations. The definitions considered above take into account the company internal state, its solvency, resource and capital management, external environment in which it operates, resistance to external factors but at the same time the considered definitions of financial stability fail to take into account efficient management of corporate resources which over the long term manifests itself in corporate profit and capital growth, in enhancement of financial stability. At the third stage of the experiment we selected external factors which influence financial stability of construction companies of the Siberian Federal District of the Russian Federation (Table 1). Applying the logit model we will determine with a better accuracy influence of external factors on financial stability of construction companies
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