Anca Munteanu

Do Romanian Banking Institutions Create Shareholder Value

Abstract This study aims at identifying the evolution of some of the key value based indicators in the case of Romanian listed banks. In particular we compute value based measures like Residual Income RI and Market Value Added MVA but also traditional measures like Earnings per Share EPS and Price to Earnings ratio PER in order to have a detailed view on the evolution of shareholder value creation in the banking industry for last seven years 2005-2011. As results suggest BRD represents the greater shareholder value creator in the case of the listed banks. On the other hand EBS is the greater value destroyer. The other listed banks TLV and BCC can be characterized as value preserver as they don’t destroy nor create shareholder value.

Regional Convergence in Romania: From Theory to Empirics☆

Abstract This paper adds to the current literature regarding the economic development of Romanian regions by providing a test of unconditional convergence of growth rates between 1995 and 2011. The results show a divergent trend during the period taken into analysis as regions with higher initial GDP values will exhibit higher growth rates during the analyzed period. The obtained beta coefficient as well as the correlation coefficient between the dependent and independent variable displays diminishing values over time showing that initial values of real GDP are poor predictors of economic growth rates. Moreover, given the fact that the neoclassical approach is not validated by empirical data, the alternative framework, respectively the endogenous growth model seems to be better suited for the Romanian reality.

IFRS Adoption in Romania: The Effects upon Financial Information and its Relevance

Abstract Starting from 2012, listed Romanian entities have to report their individual financial statements using International Financial Reporting Standards. This study is focusedon presenting the differences between Romanian Accounting Standards and IFRS when financial information is analysed. The research is conducted upon the companies that are listed on BSE and tries to demonstrate if statistically any significance in mean, median and variance was observed among several accounting measures and financial ratios. An analysis upon the entire market and its subsamples, considering companies specialisation, was conducted. The results reveal that no statistically significant differences at median and mean level were observed. The relevance could be identified at variance variation considering the solvency ratio and the return on equity one. Regarding the subsample analysis, the results are mixt.

Measuring the Performance of Romanian Listed Companies Considering their Individual Characteristics

Abstract The aim of this paper is to provide evidence about the financial performance that the companies that are listed on a regular market obtained. The financial performance can be influenced by individual characteristic of the entity, like: size, indebtedness ratio, and liquidity ratio, type of the auditor, the industry where they act or other particular features. The research was conducted upon the Bucharest Stock Exchange (BSE). It took into consideration the entities that have to report their individual financial statements under International Financial Reporting Standards (IFRS). This regulation is compulsory for entities that are admitted for listing on a regular market from 2012. The study provides proper evidence about the factors that influence the entities’ performance. Both quantitative and qualitative measures were taken into consideration. The qualitative elements were quantified using dummy variables (the development region, the type of auditor, the specialization field, the case in which major shareholder has more than 50% of the shares). The results emphasize the important of several variables (i.e. the companys size, the region where the entity acts, the companys indebtedness ratio, and the companys age) that have significantly influenced, both in a positive and a negative way, the financial performance. Considering the area in which the company is specialized, no reliable information was detected. It seems that neither return on equity, neither return on assets, neither cash flow from operation divided by total assets are reliable financial measure though which the influence of specialization can be properly reflected. Considering geographical regions, companies from nord - west region and from the west region do obtained a lower financial performance that that that its obtained if the company act in other development region.

Stock Market Globalization: The Case of Emerging European Countries and the US

Abstract The paper uses a linear research design in order to investigate the globalization of returns between the US market and twelve Emerging European Countries (EEC) in the period 2005-2013. The objective of the study is to identify if there exists a significant relationship between co-movements of returns obtained in the US stock market and those obtained in the EEC markets. Towards this end, the study employs a Vector Error Correction Model (VECM) and a Granger Causality test assuming the relations between returns are of a linear manner. The results present statistically significant coefficients for the VECM model. Also, we fail to reject of the null hypothesis in the case of Granger causality test. Both findings advocate that between the US developed and the emerging stock markets exists a statistically significant degree of interconnection in terms of obtained returns.

Fiscal Policy and Performance of Banking Systems Interactions:the case of Romania

Abstract This paper considers the role of fiscal policy as a component of stabilization policy in Romania, based on the assumption that some relevant relations exist between credit cycles and fiscal policy over the business cycle. The paper analyses the relations between the banking sector fluctuations and taxation and public spending during 2008-2011. Our research is based upon market values of performance assessment – Residual Income, Market Value Added, Earnings per Share, and Price to Earnings ratio - which offer a more realistic view regarding the evolution of banking institutions value reflecting investors decisions and anticipations. Connecting the theory to Romanian banking system data we find that some of the bad financial performance associated with this period is to be explained by the contraction of the demand and not necessary with the earnings obtained by the Romanian listed banking institutions. According to our study, the evidence supports claims that Romanian fiscal policy is pro-cyclical and hence destabilizing over the analysing period. The aim of the paper is to provide some empirical basis for the argument that pro-cyclical fiscal policy does not assist in repairing the financial system.