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Recovery after Demerger: Evidence from Romanian Companies

Author

Listed:
  • Constantin Duguleana

    (Finance, Accounting and Economic Theory Department, Transilvania University of Brasov, 500036 Brasov, Romania)

  • Liliana Duguleana

    (Management and Economic Informatics Department, Transilvania University of Brasov, 500036 Brasov, Romania)

  • Camelia Mirela Baba

    (Finance, Accounting and Economic Theory Department, Transilvania University of Brasov, 500036 Brasov, Romania)

  • Cristina Drumea

    (Finance, Accounting and Economic Theory Department, Transilvania University of Brasov, 500036 Brasov, Romania)

Abstract

The paper follows the demerger phenomenon in Romania in order to find out whether companies regain their economic performance after reorganization. The research is based on four samples of companies, divided into 2012, 2013, 2014, and 2015, that recorded their financial indicators in the period from 2005–2019. Using the financial indicators of companies that demerged in the same year, we analyzed the economic performances before and after the demergers, using statistical and econometric methods. The model with the fixed effects of the cross sections proved to be the most suitable for each panel, both for the entire analyzed period and for the two subperiods: ante and post demerger. The subperiod models are better than the panel econometric models for the entire period. The results show that all of the Romanian companies recovered after the demergers, and also to what extents. The validities of the econometric models confirm the sustainability of the economic activities after the demergers. This paper provides a study methodology and econometric models to investigate the demerger phenomenon among Romanian companies.

Suggested Citation

  • Constantin Duguleana & Liliana Duguleana & Camelia Mirela Baba & Cristina Drumea, 2022. "Recovery after Demerger: Evidence from Romanian Companies," Sustainability, MDPI, vol. 14(3), pages 1-27, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1151-:d:729023
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    References listed on IDEAS

    as
    1. Michail Pazarskis & George Drogalas & Andreas Koutoupis, 2018. "Mergers and Accounting Performance: Some Evidence from Greece during the Economic Crisis," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 17(1), pages 31-45, March.
    2. Han Bao, 2017. "Evaluation of Pre and Post Demerger-Merger Performance: Using ABN AMRO Bank as an Example," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(2), pages 196-204, February.
    3. Dionysios Polemis & Thanasis Karlis, 2016. "Measuring Post-Merger and Acquisition Performance of Corporations in the Maritime Transport Sector," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 66(3), pages 83-93, July-Sept.
    Full references (including those not matched with items on IDEAS)

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