The Impact of Financial and Economic Crises on the Performance Indicators of Copper Mining Enterprises

Abstract

The article establishes and characterizes the direction and power of the influence of the cyclical nature of the economy and economic shocks on the performance of activities (characterized by the amount of revenue of companies) of the copper industry. To achieve this purpose the authors solved the following tasks: revealed the cyclical nature of the development of the Russian economy periods of recessions (financial and economic crises) and booms using the Hodrick-Prescott filter (HP-filter); analyzed the cyclical nature of the corporate economy of the copper industry enterprises using HP-filter and quarterly data of financial statements of PJSC MMC Norilsk Nickel and Uralelectromed JSC from the 1st quarter of 2008 to the 3rd quarter of 2017; determined the power and direction of the influence of indicators of the development of the Russian economy on the performance indicators of the copper industry enterprises, using the results of econometric analysis; interpreted the results of the economic-statistical model.When writing the work the authors used methods of comparative analysis and synthesis of information obtained from various sources. A content analysis of analytical materials from the recent leading domestic and foreign publications has been conducted. The cyclical development of the economy (identification of the financial and economic crisis) was evaluated using the HodrickPrescott-method. Statistical data was analyzed (panel data of the enterprises of PJSC MMC Norilsk Nickel and JSC Uralelectromed from Q1 2008 to Q3 2017), and based on the analysis a regression model estimated using the least squares method was compiled. The study concluded that, despite the export orientation of copper industry products — copper cathodes, copper powder, etc. — external state economic shocks directly affect the business performance of copper companies. The findings of the presented work can be applied by the management of metallurgical holdings and individual enterprises of the copper industry for the purpose of theoretical substantiation of corporate development programs, as well as regional executive authorities to identify ways to increase the investment attractiveness of the region. Keywords— economic shocks; business performance; copper industry; Least Squares Method; regression analysis; economicstatistical modeling; Hodrick-Prescott filter.