The impact of adopting corporate governance principles in romania: Economic performance or just good practices?

Abstract

The paper intends to capture the importance Romania gives to corporate governance domain. The study wants to outline the extent to which listed companies on the Bucharest Stock Exchange respect the principles of corporate governance, whether they offer explanations and whether this compliance leads to a better performance of the companies. Another objective is to capture the capacity of the entities to attract more investors through the compliance with corporate governance. The study is based on a sample of 16 listed non financial companies from Romania. When referring to the results, the computations show that the companies from the sample respect more than 70% the code of corporate governance, as these entities declare. Using the regression analysis, it was concluded that less than a third of the compliance with corporate governance principles leads to a higher performance, but it seems there is no clear relationship between the level of compliance with corporate governance principles and the attractiveness of the companies. The analysis of the “Comply or Explain” statement for the selected companies from Romania highlighted some weaknesses related to the attitude towards the conformity with corporate governance principles.