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Efficiency-Based Restructuring Approach Of Romanian Economy

Author

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  • Dumitru Dan Popescu

    () (Faculty of Accounting and Management Information Systems Academy of Economic Studies Bucharest, Romania)

Abstract

Large-scale corporate restructuring made necessary by a financial crisis is one of the most daunting challenges faced by economic policymakers. The financial crisis at the end of 2008 has brought back , in the Romanian economy too, the problem of the negative economic growth, of the massive interenterprise arrears and the huge losses of the business operators (this time,privately owned) as well as the need for restructuring not only of the residual state portfolio or government entities, but also for the private sector through the means of market economy. A comprehensive strategy and methodology for restructuring, encompassing both the corporate and financial sectors, is put in place once the economic crisis in Romania is judged to be systemic in scope. The extent of the restructuring, the required resources and timing became the critical issues. These issues are and were compounded by contention for scarce resources, lack of legal framework, lack of expertise within the Romanian enterprises and inefficiencies resulting from the activity being carried out across the economy by various entities. The actions that will be taken have to be justified on a cost - benefit basis and measured to ensure that the desired results are achieved within a certain timeframe setting-up the concept of “Efficiency-Based Restructuring”. This concept was tested and proved to be competitive, during the large scale restructuring process of the mid nineties in Romania.

Suggested Citation

  • Dumitru Dan Popescu, 2011. "Efficiency-Based Restructuring Approach Of Romanian Economy," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 58, pages 459-475, november.
  • Handle: RePEc:aic:journl:y:2011:v:58:p:459-475
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    References listed on IDEAS

    as
    1. Croitoru Lucian, 2011. "O falsă problemă: compromisul între constrângerea externă şi imperativele sociale," Revista OEconomica, Romanian Society for Economic Science, Revista OEconomica, issue 01, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    restructuring; liquidation; corporate governance; privatization; economic crisis;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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