THE IMPACT OF MACROECONOMIC FACTORS ON CORPORATE SOLVENCY IN LITHUANIA

Abstract

This study examines the impact of macroeconomic factors on corporate solvency in Lithuania. Solvency is a crucial financial indicator reflecting a company’s ability to meet its financial obligations and maintain stability in the market. The research focuses on long-term solvency and evaluates how key macroeconomic variables—GDP, inflation, interest rates, and unemployment—affect firms' financial stability. The study employs regression analysis to quantify the impact of these factors, using data from official statistical sources. The results reveal that GDP has a statistically significant positive effect on corporate solvency (p < 0.05), while higher interest rates negatively affect firms' financial stability (p < 0.01). The influence of inflation remains ambiguous (p ≈ 0.10), and unemployment was not found to have a statistically significant effect. The findings suggest that economic growth contributes to improved corporate solvency, while increasing interest rates create financial pressure on firms. These insights are valuable for policymakers and business leaders in shaping strategies to mitigate financial risks and enhance economic resilience. Future research could explore sector-specific effects and the impact of external shocks, such as geopolitical crises or pandemics, on corporate solvency.