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New Companies’ Formation In Romania. A Pvar Model Approach

Author

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  • Dalina-Maria ANDREI

    (Institute of Economic Forecasting, Bucharest, Romania)

Abstract

This paper is an empirical analysis of determinants for new companies' formation and uses data from 42 Romanian counties (including Bucharest municipality) that belong to the 2010-2019 year interval. The exogenous here picked are found by the literature to be influential on new companies' formation. Results come out of a PVAR model applied (unrestricted vector autoregressive model applied on panel data). Granger causality results between regional GDP, unemployment rate, density of regional population, and entire entrepreneurial activity in Romania, on the one hand, and new companies' formation on the other, as endogenous. Stationarity and co-integration tests as well as lags criteria were done previously of estimating that PVAR model. All variables are found to be stationary of order one I(1), but test for co-integration was inconclusive. So, in absence of a certain co-integration, a VAR (and not a VECM) was chosen for estimations. Results confirm a relationship between almost all variables, tests for stability confirm that no root lies outside the unit circle and VAR satisfies the stability condition.

Suggested Citation

  • Dalina-Maria ANDREI, 2021. "New Companies’ Formation In Romania. A Pvar Model Approach," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 62(2), pages 30-45, June.
    • Handle: RePEc:ath:journl:v:62:y:2021:i:2:p:30-45
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    References listed on IDEAS

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    More about this item

    Keywords

    new companies' formation; entrepreneurship; VAR model; panel data;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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