Factors Affecting Corporate Performance in Countries and Industries
First, the procedure of the factor analysis was conducted on the objects treated as industries in countries in order to initially verify the number of factors. Since the use of Kaiser’s criterion would lead to retaining too many factors (eight), difficult to interpret and not simplifying the data structure significantly, the Cattell’s scree plot test shown in Fig. 5.1. was applied in order to determine the optimal number of factors. According to this test, the first four factors should be retained, as that is where the scree plot shows a separation between the most important components and the less important ones.
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