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Central and East European Corporate Finance: Between Commonality and Heterogeneity

Author

Listed:
  • Morar Triandafil, Cristina

    (National Bank of Romania)

  • Poanta, Dorina

    (University of Finance and Banking)

Abstract

In order to reveal the corporate finance characteristics, we conduct a panel data study on companies located in five countries within the CEE area (the Czech Republic, Hungary, Poland, Romania and Slovakia). We identify common features in terms of capital structure and financial indicators interdependencies, but also country specific elements, which strengthen the assumptions of heterogeneity at the level of corporate finance. We reveal that both firm specific and common factors have an impact on CEE corporations; nevertheless, compared to similar papers, the degree of heterogeneity is lower, confirming the theories of CEE inter-country high correlation. In comparison with similar previous approaches, our research develops a more extended perspective on CEE corporate finance peculiarities. We emphasize the interactions across a wider range of financial indicators relating to profitability, asset management and capital structure ratios in the light of the country and firm-level characteristics. We point out that in the light of the macroeconomic stabilization process (encompassing the catching up period and subsequently the EU integration), heterogeneity degree lowers.

Suggested Citation

  • Morar Triandafil, Cristina & Poanta, Dorina, 2011. "Central and East European Corporate Finance: Between Commonality and Heterogeneity," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 132-161, September.
    • Handle: RePEc:rjr:romjef:v::y:2011:i:3:p:132-161
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    More about this item

    Keywords

    CEE; corporate finance; capital structure; performance;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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