Corporate management is often accused of short-term oriented behaviour related to R&D expenditures. This study analyses the influence of R&D volatility and R&D intensity on the market capitalization of pharmaceutical and medical research... more
Corporate management is often accused of short-term oriented behaviour related to R&D expenditures. This study analyses the influence of R&D volatility and R&D intensity on the market capitalization of pharmaceutical and medical research companies from Europe, considering the institutional context and several firm characteristics. Panel regression estimations on a sample of 217 companies for 2014–2019 indicate that R&D volatility adversely affects market value. The analysis is conducted on the entire sample and on sub-samples determined based on the positive and negative values of the R&D volatility. This differentiates between the continuous and the disrupting effect of R&D activities and the firm’s shift between exploratory and exploitative innovations. The positive volatility sub-sample provides consistent evidence of a significant negative influence of the R&D volatility on the market value. For the negative volatility sub-sample, R&D intensity and its interaction with R&D volat...
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The transition from the industrial economy to the knowledge-based economy has changed the status quo, and consequently, intangibles have gained traction in the scientific discourse of recent decades. The paper aims to scrutinise,... more
The transition from the industrial economy to the knowledge-based economy has changed the status quo, and consequently, intangibles have gained traction in the scientific discourse of recent decades. The paper aims to scrutinise, econometrically, the nexus between intangibles and firm performance and the moderating role of CEO duality and CEO gender. Capital-intensive industries are largely overlooked by previous studies, which prompted us to explore the electricity and gas industry. The analysis is based on a longitudinal dataset of EU-listed companies and employs a quantitative approach to study the causal relationships between intangibles, firm performance, and CEO characteristics. Results demonstrate that intangible assets are a stepping stone to better financial and market performance, which endorses the resource-based view. Today’s social and cultural milieu sees gender diversity in a positive light. Consonant with the upper echelons theory, the study finds that CEO gender pos...
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PurposeThis study was aimed at testing whether the technology transfer performance of Romanian public research institutes—measured as the ability to generate patented technology—was positively related to institutional, human, commercial... more
PurposeThis study was aimed at testing whether the technology transfer performance of Romanian public research institutes—measured as the ability to generate patented technology—was positively related to institutional, human, commercial and financial factors.Design/methodology/approachA non-negative integer count data model was implemented to investigate a large sample of Romanian public research institutes in the period 2012–2019.FindingsThe results confirmed the positive influence of qualified human resources and commercial resources (technology transfer offices and spinoffs). Institutional factors were also relevant alongside the research field.Research limitations/implicationsThe paper has limitations inherent to an investigation conducted in an emerging economy, with a low innovative culture and little interest in technology transfer. Although the analysis focused on a specific country, the findings obtained may be extended to other contexts.Practical implicationsTo increase th...
This research is a hypothetical-deductive study whose purpose is to analyse if, in the case of non-financial companies quoted on the regulated market of the Bucharest Stock Exchange, the reporting of the information on Comprehensive... more
This research is a hypothetical-deductive study whose purpose is to analyse if, in the case of non-financial companies quoted on the regulated market of the Bucharest Stock Exchange, the reporting of the information on Comprehensive Income is relevant for the investors. The present paper also aims to identify several degrees of value relevance for Comprehensive Income, in direct correlation with the informational value of certain stock return indicators for the investors. For the analysed population and for the time horizon taken into account, we noticed that Other Comprehensive Income per Share, the variance of Other Comprehensive Income per Share and the Differences from the revaluation of tangible and intangible assets in relation to the investment per share are expressive predictors for the investors on the financial market. The ranking of the effects of reporting the information on Other Comprehensive Income expresses the most visible relevance in Goodwill Per Share, then in th...
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Romanian banks use derivatives to hedge against or speculate on the movement of economic variables such as foreign exchange rate or interest rate. To report these contracts, they apply the IFRS in both consolidated accounts (from 2007... more
Romanian banks use derivatives to hedge against or speculate on the movement of economic variables such as foreign exchange rate or interest rate. To report these contracts, they apply the IFRS in both consolidated accounts (from 2007 onwards) and individual accounts (starting with 2012). This paper analyzes disclosures on derivatives for a 6-year period (2007- the year of the EU adhesion -2012) based on 132 financial statements available. The findings show that more than 72% of Romanian banks use derivatives, mostly for economic hedges and without much application of hedge accounting. Swaps are the most important contracts and foreign exchange risks the most protected against. On average, disclosures on derivatives follow the IFRS rules but provide little additional information beyond the minimum requirements which enables ambiguities and misinterpretations from users of the financial statements.
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The aim of this paper is to study the value relevance of IFRS-based accounting information regarding financial instruments provided by non-financial Romanian groups quoted on Bucharest Stock Exchange for the period 2011-2013. Data from... more
The aim of this paper is to study the value relevance of IFRS-based accounting information regarding financial instruments provided by non-financial Romanian groups quoted on Bucharest Stock Exchange for the period 2011-2013. Data from both consolidated and parent-only accounts are tested using a modified Ohlson model to show the empirical correlation between stock market prices and accounting numbers. We find that at parent company level, the information about financial assets is more value relevant than the one about financial liabilities. At group level, investors rely mostly on information about financial assets, ignoring the one about financial liabilities. Moreover, results show the superiority of parent company’s individual accounts over the consolidated ones in terms of value relevance of financial instruments information.
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Many specialists consider that financial instruments such as credit derivatives are, among other factors, to be blamed for the current financial crisis. This financial engineering, called credit deriva-tives, long praised as a great way... more
Many specialists consider that financial instruments such as credit derivatives are, among other factors, to be blamed for the current financial crisis. This financial engineering, called credit deriva-tives, long praised as a great way of diffusing risks for banks, encouraged many financial institutions to take higher risks on loans than they should have. Their huge success took everybody, including their creators, by surprise. In just a few years, the credit derivatives market reached a staggering $60 tril-lion contracts and, unfortunately, multiplied the complexity and opaqueness of the financial world. That is why some people considered that the massive use of these instruments played an important role in creating the financial crisis. Paradoxically, some specialists did not accuse the irresponsible use of sophisticated derivatives of having generated the crisis but the accounting rules applicable for these instruments and the reporting rules issued by the American and internati...
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This paper investigates the relationship between management quality and bank performance through a system of bank-specific factors, under the constraint of the prudential regulations and the macroeconomic environment. The research, based... more
This paper investigates the relationship between management quality and bank performance through a system of bank-specific factors, under the constraint of the prudential regulations and the macroeconomic environment. The research, based on multiple linear regressions, analyzes a sample of 207 banks from 29 European countries, grouped according to the IMF classification into emerging and developed countries, for the period 2010-2015. We find that performance is positively influenced by: the efficiency of managing the bank assets; the high weight of traditional banking activities in total activities; the inflation; the economic growth rhythm, combined with the monitoring of the credit and liquidity risks. Performance is negatively correlated with the raise in the banking functionality costs and the diversification of activity through financial investments on the capital markets. This research extends the existing literature by analyzing the post-crisis period and by introducing the i...
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The financial crisis that hit the American economy to its heart in September 2008, rapidly spreading all around the world, has generated strong debates on the use of exotic derivatives financial instruments and of fair value accounting.... more
The financial crisis that hit the American economy to its heart in September 2008, rapidly spreading all around the world, has generated strong debates on the use of exotic derivatives financial instruments and of fair value accounting. These themes that made front-page news all over again raised divergent opinions among bankers, insurance executives, auditors or politicians more or less affected by the crisis. This paper aims at reviewing the situation of financial markets, identifying the role and importance of fair value accounting and derivatives within these huge scandals, presenting both for and against fair value and credit derivatives opinions and giving some anti-crisis solutions for the future.
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Because of the financial and economic crisis that has affected Romania since October 2008, many people do no longer qualify for the bank loans they need to finance their investments or daily expenses. The alternative could be getting the... more
Because of the financial and economic crisis that has affected Romania since October 2008, many people do no longer qualify for the bank loans they need to finance their investments or daily expenses. The alternative could be getting the money by pledging a personal good (especially jewelries) to a pawnshop. According to Romanian laws, pawnshops are non-banking financial institutions that offer monetary loans in exchange for movable assets that are pledged by the customers. They are organized as commercial companies and are supervised by the National Bank of Romania, being recorded into the Entry Register held by this institution. Nonetheless, the pawnshops do not apply accounting rules available for credit institutions, but they prepare the financial statements according to the regulation applied by commercial companies. The paper addresses the peculiarities of the pawnshops’ activities in terms of legal, fiscal and accounting aspects. By giving a practical example, the paper empha...
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The purpose of this paper is to assess the financial performance of Romanian banks involved in M&A activities, as target banks, over a period of 10 years (1998-2008). Performance is analyzed in terms of profitability by using traditional... more
The purpose of this paper is to assess the financial performance of Romanian banks involved in M&A activities, as target banks, over a period of 10 years (1998-2008). Performance is analyzed in terms of profitability by using traditional accounting measures: ROE, ROA and NIM. Post-M&A performance for a 3-year period is compared with the aggregate ratios from all Romanian banks. The findings are mixed. On one hand, bank M&A in Romania does not result in improved ROE or ROA in the post M&A 3-year period under review. On the other hand, merged banks report media NIM above industry.
The paper analyzes the reaction of residential property prices to sustainability attributes and the extent to which they capitalize the effects of sustainability on real estate markets in EU-28 countries in the period 2000–2018. Given... more
The paper analyzes the reaction of residential property prices to sustainability attributes and the extent to which they capitalize the effects of sustainability on real estate markets in EU-28 countries in the period 2000–2018. Given that the sustainable real estate market is mainly driven by demand, the sustainability attributes included in the study reflect both buyers’ expectations and their investment potential in sustainable residential properties, and developers’ efforts to become more “sustainable” through responsible property investment. In order to correspond to the current meaning of sustainable development, the variables capture the four dimensions that give content to the concept of the quadruple bottom line: economic, social, environmental and institutional. Using panel data and the two-stage least squares (2SLS) method, the research reveals a pronounced sensitivity of residential property prices to all sustainability dimensions in countries considered leaders in imple...
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As transparency has become the new paradigm of economic activities, we set out to analyse the extent to which the EU real estate companies legitimise their role in society through the sustainable development goals (SDGs) while meeting... more
As transparency has become the new paradigm of economic activities, we set out to analyse the extent to which the EU real estate companies legitimise their role in society through the sustainable development goals (SDGs) while meeting stakeholders’ information needs. Applying the content analysis, the sustainability reports and the annual reports of the entities from the real estate sector, from 2016 to 2018, were studied in order to highlight the priority SDGs of the field and the extent to which they are integrated in their business models. In addition, we evaluated, based on a quality score, the depth with which the entities report their sustainability commitments. The results of the study show that although more and more real estate entities are expressing their interest for sustainable development, there is still a large gap between the assumed intentions and the real actions undertaken by the companies. Most of them do not have the strategy, culture and tools needed to turn su...
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The aim of this paper is to study the impact of the transition to IFRS on financial assets and liabilities reported by non-financial companies listed on the Bucharest Stock Exchange. It uses data from the individual financial statements... more
The aim of this paper is to study the impact of the transition to IFRS on financial assets and liabilities reported by non-financial companies listed on the Bucharest Stock Exchange. It uses data from the individual financial statements for the comparative year 2011, prepared under both Romanian accounting standards (RAS) and IFRS. Through a set of financial ratios involving information from balance sheet, income statement and cash flow statement, we study how the IFRS adoption affected financial assets and liabilities. We also test the empirical correlation between profitability (measured by ROE) and financial assets/ liabilities before and after the transition to IFRS. We find that financial instruments are very little affected by the change in the accounting system. However, the association between ROE and financial assets/ liabilities is of greater intensity for the IFRS data.
The aim of this paper is to study the determinants of inward foreign direct investments (FDI) at a multi-regional and European level, while focusing on a series of macroeconomic factors, in the FDI receiving countries. Multiple regression... more
The aim of this paper is to study the determinants of inward foreign direct investments (FDI) at a multi-regional and European level, while focusing on a series of macroeconomic factors, in the FDI receiving countries. Multiple regression analysis and ANOVA analysis of variance are applied. Findings show that the degree of economic freedom is a significant factor of multi-regional inward FDI during the period 2012-2015, but this effect is caused only fiscal freedom, government spending, monetary, trade, and financial freedom. For the more economically and politically stable European countries, the level of economic freedom does not influence their inward FDI. At the same time, market size and level of economic development of the host countries have a positive influence on FDI inflows, while financial markets development, workforce availability and adoption of the International Financial Reporting Standards (IFRS) are not significant determinants.
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The aim of this paper is to study the impact of the transition to IFRS on financial assets and liabilities reported by non-financial companies listed on the Bucharest Stock Exchange. It uses data from the individual financial statements... more
The aim of this paper is to study the impact of the transition to IFRS on financial assets and liabilities reported by non-financial companies listed on the Bucharest Stock Exchange. It uses data from the individual financial statements for the comparative year 2011, prepared under both Romanian accounting standards (RAS) and IFRS. Through a set of financial ratios involving information from balance sheet, income statement and cash flow statement, we study how the IFRS adoption affected financial assets and liabilities. We also test the empirical correlation between profitability (measured by ROE) and financial assets/ liabilities before and after the transition to IFRS. We find that financial instruments are very little affected by the change in the accounting system. However, the association between ROE and financial assets/ liabilities is of greater intensity for the IFRS data.