U.S. and Japanese electronic and electrical equipment manufacturing firms: A comparison

In this study, we compare the financial characteristics of U.S. and Japanese electronic and electrical equipment manufacturing firms using the Multivariate Analysis of Variance (MANOVA) method with data drawn from the DISCLOSURE database for the December 31, 2001-December 31, 2005 period. The multivariate test statistics indicate that the overall financial characteristics of U.S. and Japanese firms are significantly different. The univariate test statistics show that U.S. firms have significantly higher inventory turnover, whereas Japanese firms have significantly higher total assets turnover. U.S. firms have significantly higher liquidity and equity levels. These results imply that Japanese firms have significantly higher liquidity risk and financial risk compared with U.S. firms. The profitability ratios of firms in the two countries are not significantly different.