Georgeta Vintilă

EMPIRICAL RESEARCH TOWARDS THE FACTORS INFLUENCING CORPORATE FINANCIAL PERFORMANCE ON THE BUCHAREST STOCK EXCHANGE

Abstract This study aims to investigate the potential factors of influence on corporate financial performance, by using the panel data regression analysis. The research was employed for a sample consisting of 40 companies listed on the Bucharest Stock Exchange, over the period 2010-2012. Corporate financial performance considered as the dependent variable was proxied through return on assets, return on equity, and Tobin’s Q ratio. There were selected the following factors that could influence corporate financial performance: capital structure, firm size, and corporate social responsibility involvement. Likewise, several control variables have been introduced: structure of the ownership and institutional investors. The results show a strong negative relationship between corporate financial performance and debt to equity ratio. Also, there has been revealed a positive influence of the company size on performance, although weak. Furthermore, the relationship between financial performance and social performance has been statistically validated, both using accounting and market ratios.

The Impact of Ownership Concentration on Firm Value. Empirical Study of the Bucharest Stock Exchange Listed Companies

Abstract The aim of this study consists in providing the first empirical evidence for the companies listed in Romania regarding the influence of ownership concentration on firm value. The empirical research was employed for a sample of companies listed on the Bucharest Stock Exchange (BSE), over the period 2007-2011, being estimated multivariate regression models for panel data, unbalanced, with fixed effects. The value of the companies was measured out by the instrumentality of Tobins Q ratio, however adjusted with the purpose of taking into account the industry membership diversity of the selected sample. We considered distinctly the ownership of the first, the second, and the third largest shareholder, as well the sum of holdings of the two largest shareholders and the sum of holdings of the three largest shareholders. Therefore, the results sustain a lack of influence on firm value exhibited by the first largest shareholder, while the second largest shareholder positively influences firm value. By considering the ownership of the third largest shareholder we identified a positive influence, but down to a level of holdings of 13.08 percent, thereupon the influence becomes negative. Thereby, beyond the identified threshold we could perceive the reduction of the third largest shareholder’ concern regarding the process of directors’ monitoring, thus following the own aims’ achievement. Further, from the ownership concentration perspective only the sum of holdings of the three largest shareholders positively influences firm value. However, there was not identified any statistically significant relationship between the sum of holdings of the two largest shareholders and firm value. Accordingly, the results are influenced by the context of an underdeveloped Romanian capital market within the first largest shareholder ownership discourages the occurrence of another investors holding significant stakes.

Fiscal Pressure and Tax Mix Convergence in the European Union

The convergence of taxation systems among the member states of the European Union has long been a major issue of debate. As the union continues to expand its borders, the convergence of the tax mix and of the fiscal pressure seemed to have been pushed aside in favor of other more pressing matters. However, with the recent signing of the Treaty for a Fiscal Stability Pact by 25 of the member states the question of fiscal convergence is once again in the limelight. In the current study, with the help of cluster analysis techniques, we will focus on finding and describing tax convergence tendencies in the European Union. We will not only show that taxation convergence tendencies exist among the member states, but we will also describe fiscal convergence groups and show their evolution from 1965 up until the present.

Exploring the link between environmental pollution and economic growth in EU-28 countries: Is there an environmental Kuznets curve?

This study examines the Environmental Kuznets Curve hypothesis (EKC), considering the primary energy consumption among other country-specific variables, for a panel of the EU-28 countries during the period 1990–2014. By estimating pooled OLS regressions with Driscoll-Kraay standard errors in order to account for cross-sectional dependence, the results confirm the EKC hypothesis in the case of emissions of sulfur oxides and emissions of non-methane volatile organic compounds. In addition to pooled estimations, the output of fixed-effects regressions with Driscoll-Kraay standard errors support the EKC hypothesis for greenhouse gas emissions, greenhouse gas emissions intensity of energy consumption, emissions of nitrogen oxides, emissions of non-methane volatile organic compounds and emissions of ammonia. Additionally, the empirical findings from panel vector error correction model reveal a short-run unidirectional causality from GDP per capita growth to greenhouse gas emissions, as well as a bidirectional causal link between primary energy consumption and greenhouse gas emissions. Furthermore, since there occurred no causal link between economic growth and primary energy consumption, the neo-classical view was confirmed, namely the neutrality hypothesis.

The Effects of Corporate Board and CEO Characteristics on Firm Value: Empirical Evidence from Listed Companies on the Bucharest Stock Exchange

ABSTRACT This article investigates the influence of characteristics of the corporate board and chief executive officer (CEO) on firm value, using a sample of companies listed on the Bucharest Stock Exchange from 2007 to 2011. We consider board independence, committees, size, and diversity as board characteristics, as well as CEO characteristics such as CEO age, tenure, dual roles of CEO and chairman, country of residence, and gender. We employ the Tobin’s Q ratio as a proxy for firm value. We find evidence that board size negatively influences firm value, whereas curvilinear relationships are found among board independence, diversity, and firm value. Also, CEO tenure positively influences firm value, whereas the other governance variables are not statistically significant.

Comply or Explain Approach and Firm Value on the Bucharest Stock Exchange

This paper aims at exploring the influence of compliance with the principles and recommendations stated within the Bucharest Stock Exchange (BSE) Corporate Governance Code on firm value, for a sample of companies listed in Romania, in 2011. Firm value was proxied both through accounting measures (such as return on assets, ROA and return on equity, ROE) and market measures (such as earnings per share, EPS), all being industry-adjusted. Based on the ‘Comply or Explain’ Statement issued by the BSE, there was conceived a questionnaire having the purpose to develop corporate governance ratings. Thus, we report the global corporate governance rating and a set of specific ratings as regards transparency and reporting, board and committees, shareholder rights, as well as corporate social and environmental responsibility. Therefore, by estimating several multivariate linear regression models, our results provide support for a positive and statistically significant relationship between the rating related to transparency and reporting and firm value, likewise between the rating related to corporate social and environmental responsibility and firm value, but only for industry-adjusted ROA. However, there was noticed the lack of any statistically significant relationship between corporate governance ratings and firm value, when industry-adjusted ROE and industry-adjusted EPS were employed.

Towards Valuation Multidimensional Business Failure Risk for the Companies Listed on the Bucharest Stock Exchange

Current research aims at developing a comprehensive financial instrument towards valuation business failure risk for a sample of 69 companies listed on the Bucharest Stock Exchange in 2013. There were considered several financial ratios such as liquidity ratios (e.g., current ratio, quick ratio, cash ratio), indebtedness ratios (e.g., general indebtedness ratio, financial stability ratio, global financial autonomy ratio, financial independence ratio, borrowing capacity ratio, long-term financial autonomy, leverage ratio, debt service coverage ratio), as well as solvency ratios (e.g., global solvency ratio and patrimonial solvency ratio). By taking into consideration the large number of selected ratios, we employed the principal component analysis as multidimensional analysis technique which ensures the non-redundant decomposition of the total variability out of the initial causal space through a lower number of components. Thereby, there were retained five principal components (being underlined liquidity, financial autonomy, financial independence, debt service coverage ratio, and solvency) which cumulate 90.5895 % of the initial information. Subsequently, based on the selected principal components we reported the aggregate business failure risk indicator.

Exploring the Link between Corporate Governance Characteristics and Effective Corporate Tax Rate: A Panel Data Approach on U.S. Listed Companies

We blend the corporate governance and corporate taxation literature streams to study the association between board, abreast CEO characteristics, and effective corporate tax rate. We have tried to sweep a broad brush over a large number of different econometric techniques that are relevant to the analysis of financial data. Using a sample of 50 companies, mainly from the technology area, listed at NASDAQ and component of Dow Jones index, over the period 20002013, the empirical approach employs panel least squares and quantile regressions, as well as robustness checks by means of estimated generalized least squares, generalized linear model, and generalized method of moments. We find that board independence and board size have a statistically significant negative impact on effective corporate tax rate. It is also important to note that board independence Granger cause corporate taxation. Regardless of its robustness, CEO ownership reveals a mixed influence: positive for quantiles between 0.3-0.5 and negative at the 0.9 quantile. We also find a mixed relationship between CEO tenure and corporate taxtion.

Empirical Approach for the US Companies in Dual Perspectives: Effective Tax Rates and the Remuneration of CEO

Many voices in the economic and financial world keep asking themselves whether the presence of the last crisis from 2007 is haunting in our global financial system and if is waiting for a more powerful return. Whatever the answer to this question, they should be aware that prosperity in terms of economic growth, social development and better living standards depends on key factors including effective fiscal management within companies. The paper addresses a topical issue with purpose of highlighting the factors that influence the effective tax rate of companies listed on US exchanges. The research focuses on effective corporate tax rate, because it captures the essence of many decisions taken by the management of a company and to support that subject we included elements of CEO remuneration. Fiscal management is a matter of interest to managers of companies that directly affects policies and investment strategies. And so it becomes a matter for the shareholders. At the base of the fiscal management is the efficient and optimal Abstract

Liquidity and Profitability Analysis on the Romanian Listed Companies

The consideration paid on studying the impact of liquidity management on financial performance has increased both in the literature and the business environment. This is a concept linked with financial stability. Before the crisis from the previous years, financial stability was considered a matter of macroeconomics, assessed at country level or as a link between markets. However, at the present, companies also approach the financial stability issue. In Romania, the effects of the financial crisis have manifested with a certain time lag compared to its onset on the international Abstract