Explaining the Impact of Leverage and Operating Efficiency on Stock Performance: in Food & Beverage sector in EGX

Abstract

Nowadays, Egypt faces some fluctuations in its stock market due to the instability in firm characteristics, and economic and political conditions which resulted in threatening the survival and growth of the firms. Moreover, In Egypt, we noticed that the food and beverage industry faced some financial distress due to the severe economic circumstances they face which enforced organizations to act proactively against such a dynamic environment to survive in the markets. In the present work, the research aims to examine the impact of leverage and operating efficiency on Egyptian stock return of the listed firms of the food & beverage industry by employing the multiple linear regression for panel data analysis using the period of 2017-2022 on an annual basis, utilizing a sample of 26 listed firms in the stock exchange of Egypt. The results revealed that the leverage and operating efficiency significantly affect the stock return of the listed firms of the food and beverage industry. The leverage has a negative association with stock return while the operating efficiency is positively related.