Corporate governance and efficiency in banking: evidence from emerging economies

ABSTRACT

This article investigates the impact of corporate governance on bank efficiency across a sample of 139 commercial banks from 17 countries of Central and Eastern Europe during the period 2005–2012. Data on governance characteristics are hand-collected from banks’ reports. The empirical findings indicate that implementing rigorous corporate governance structures is associated with higher costs for banks and a lower level of efficiency. However, during the crisis, a tight governance mechanism significantly increases banks’ cost and technical efficiencies. We also show that prudent risk management is associated with both higher cost and technical efficiency for more capitalized banks, while rigid supervisory boards are linked with greater technical efficiency for more capitalized banks.     

Brain Drain: A Management or a Property Problem?

Abstract . Brain drain occurs when skilled individuals leave their native countries. It is often argued that this phenomenon has strong negative effects on the countries of origin, preventing them from capitalizing on their investment in human capital formation and thus realizing a higher growth. This analysis shows that the negative consequences of brain drain have been overemphasized, mainly because of the confusion between capital and technology. It demonstrates that investments in human capital are possible and profitable in a free market. State intervention in education is responsible for the systematic misallocation of human capital in general, and for brain drain in particular.     

Identification of Marketing Needs and Means of Communication of Romanian Marketing Companies in the Context of the Knowledge Society

A few decades ago, academics and economic pundits used to say that information is the main source of power. However, in the Knowledge Society, as we experience it today, information is readily available for everyone, and the real challenge is to master modern and complex information analysis tools, which can make sense of the information overflow of modern society, thus constituting the true competitive advantages of major economic players. For a competent analyst, data generated by a survey, for instance, can reveal paramount information about consumer behavior, competitive strategies, or any other economic and social environment-related aspect deemed important. The marketing needs of Romanian marketing companies are very diversified, commencing with the research of the needs and demand on the target market, going down to the 4Ps (Product, Price, Promotion, and Placement) and their components. The present marketing research was performed using seven categories of information sources: specialized publications in marketing; specialized publications in economics; information provided by specialized institutions in consultancy and marketing research; information provided by individual marketing specialists; information provided by advertising agencies; information provided by the economic sections of the daily newspapers; and job Websites.     

The Decarbonisation Challenge of Southeast Europe: A Case Study of Romania

Intereconomics - Not only is Romania facing some crucial energy system problems, but the proposed solutions have often been improvised and incoherent. This also raises doubts about the...     

Study of Effective Corporate Tax Rate and Its Influential Factors: Empirical Evidence from Emerging European Markets

This article examines the driving factors of the effective corporate tax rate (ECTR) for a sample of companies listed on five Eastern European stock exchanges (Romania, Hungary, Poland, Bulgaria, and Slovenia), covering the period 2000–2016. The empirical research covers variables regarding firm characteristics (e.g., profitability, efficiency of assets, indebtedness, liquidity, and solvency), firm-level controls, auditing fees, and the statutory rate. The estimated panel data models provide support for a positive link between the ECTR and profitability, debt, capital and inventory intensity, firm size, and statutory rate, strengthening the validity of political cost theory. Further, the negative link between market capitalization and assets growth supports the idea of political power theory.     

The possibilities of entering new markets for Romanian companies from wood manufacturing industries

Romania has the potential of resources, labor and real capacity to adapt to the gait of a global economic competition. But it required a long term policy and environment which could support this potential value. If not, we will risk turning into a consumer economy, consumption will not be funded on internal production and become supplier of labor services for peripheral. In the context of economic crisis, Romanian furniture retains its significant competitive advantages, including the price in export markets. The most important markets for exporters of furniture from Romania are Ukraine and Russia, markets with great potential, but affected by problems such as devaluing local currencies, and recently, imposing new duties.     

Implementation of IFRS for SMEs in Emerging Economies: Stakeholder Perceptions in the Czech Republic,Hungary, Romania and Turkey

This research investigates the perceptions of stakeholders involved in financial reporting in four emerging economies (the Czech Republic, Hungary, Romania, and Turkey) regarding the possible implementation of IFRS for SMEs, in terms of costs, benefits, and strategy of adoption. In‐depth, semi‐structured interviews were conducted with representatives of main stakeholders (preparers, auditors, regulators, professional bodies, and users). We find more support for IFRS for SMEs implementation in these four countries than suggested by the results of the European Commission's 2010 consultation for the European Union. Interviews reveal differences between stakeholder groups and between countries regarding the preferred implementation approach (mandatory adoption, voluntary adoption or convergence of national regulations with IFRS for SMEs). Interviews indicate the most support for the convergence approach. However, users oppose convergence and prefer the adoption of IFRS for SMEs. The convergence approach moves regulators' attention from users' needs to preparers' preferences and preparedness. This finding is relevant in the decision‐making process of national regulators, who should balance the needs of various stakeholders, but also the country's political and economic objectives.     

The Role and Current Status of IFRS in the Completion of National Accounting Rules – Evidence from Romania

Abstract

Romanian accounting rules (RAR) had followed a convergence process with International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) since 1999, and the level of convergence has increased over time. The Romanian accounting regulator continues to follow IAS/IFRS in internalizing the Accounting Directive 2013 Directive 2013/34/EU. Directive 2013/34/EU of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, Official Journal of the European Union, L 182/19. [Google Scholar]/34/EU. Only a few major differences still exist (some of them due the restrictions in the Accounting Directive 2013 Directive 2013/34/EU. Directive 2013/34/EU of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, Official Journal of the European Union, L 182/19. [Google Scholar]/34/EU) between RAR and IFRS. However, RAR lack the level of detail existing in IFRS, and IFRS cannot be used in practice as a source of guidance and interpretation. While major stakeholders have a positive attitude towards the convergence with IAS/IFRS, the Romanian accounting regulator intends to keep the control over RAR and avoid differences in interpretations that might have tax consequences. Despite the good level of convergence of RAR with IFRS, practitioners tend to continue to utilize the tax approach as a source of guidance and interpretation.