Economic crisis and consultancies in the province of Castellón: comparative analysis

Abstract

This paper aims to analyze the effect of the last economic crisis in the consultancies in the province of Castellón. To do that, a series of financial ratios have been studied as representative variables of the size, profitability and risk of a sample of 83 consultancy firms in the province of Castellón in 2007 and 2015, that is to say, before and after the crisis. It is expected that the level of the ratios regarding both, the profitability and the risk of these entities, will have worsened between the years under study. However, the study offers empirical evidence that the consultancies in the province of Castellón have actually seen their average levels of profitability deteriorate, but have suffered an improvement in their average levels of risk as a result of the economic crisis. The explanation could be found, precisely, in a reduction of the size of the companies, by expelling the most inefficient companies from the sector.