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Financial Sustainability For Romanian Companies - European Structural Funds Between Inter-Regional Cohesion Or Division? Part Ii

Author

Listed:
  • Laurentiu Droj

    (University of Oradea, Faculty of Economics, Finance and Accounting Department, Oradea, Romania)

  • Gabriela Droj

    (University of Oradea, Faculty of Building Construction, Cadastre and Architecture, Cadastre and Architecture Department, Oradea, Romania)

Abstract

This article contains the second part of the study “Financial sustainability for Romanian companies - European Structural Funds between inter-regional cohesion and division?” The first part of the study presented several aspects regarding the literature review, selection of the case study analysis of data based on simple statistical methods and several conclusions. This part of the study goes even deeper in the specialized literature presenting the new opinions regarding the efficiency and sustainability for usage of EU funding at the regional level. These opinions also signal several warning signs, especially when considering the increasing economic division between developed and less developed regions or regarding. Also was mentioned the dilemma between equity, which is ensured by the funding proposed to be delivered in the rural areas for ensuring the convergence policy and competitiveness which is obtained by investment high developed area in order to gain further growth. In order to establish the methodology, were analysed the most common approaches in assessing the efficiency of aid in general and European Structural Funds in particular: statistical data analysis, Social Accounting Matrix, Regionalized Hermin, Combined macro and regional model Applied Spatial New Economic Geography, GeoCells a multi-layered hierarchical automaton and Econometric methods. Since none of the studies were focused on the effects of EU funding over the private companies the authors tried to tackle this issue in the current study. Based on a database formed from 493 small and medium sized Romanian companies which directly benefitted from EU investment funding the authors decided to create, for the data analysis, a mixed methodology between the Spatial Data Analysis, Corporate finance and Econometrics. In order to solve the “dilemma” the paper through its case study assessed if there is a link between the efficiency of accessing European funds and the economic development of certain regions. This was done especially by comparing the efficiency of EU funded SMEs projects from well-developed counties with those located in less-developed counties, inside the same region.

Suggested Citation

  • Laurentiu Droj & Gabriela Droj, 2017. "Financial Sustainability For Romanian Companies - European Structural Funds Between Inter-Regional Cohesion Or Division? Part Ii," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 297-305, July.
    • Handle: RePEc:ora:journl:v:1:y:2017:i:1:p:297-305
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    References listed on IDEAS

    as
    1. Andrej Horvat & Gunther Maier, 2004. "Regional development, Absorption problems and the EU Structural Funds," ERSA conference papers ersa04p591, European Regional Science Association.
    2. Busillo & Teo Muccigrosso & Guido Pellegrini & Ornella Tarola & Terribile, 2010. "Measuring the Impact of the European Regional Policy on Economic Growth: a Regression Discontinuity Design Approach," Working Papers 6/10, Sapienza University of Rome, DISS.
    3. Chiara Del Bo & Massimo Florio & Silvia Vignetti & Emanuela Sirtori, 2011. "Additionality and regional development: are EU Structural Funds complements or substitutes of national Public Finance?," Working Papers 201101, CSIL Centre for Industrial Studies.
    4. Sebastien Bourdin, 2012. "Modeling and simulation of European Structural Funds: convergence or divergence of regions with the enlargement ?," ERSA conference papers ersa12p163, European Regional Science Association.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    SME; Financial analysis; Absorption capacity; Foreign Aid; Efficiency; European structural Funds; Cohesion policy; economic efficiency;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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