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Corporate Financing Decisions and Performance in Times of Crisis: Threat or Challenge?

Author

Listed:
  • Nicoleta-Claudia MOLDOVAN

    (West University of Timisoara)

  • Sorana VĂTAVU

    (West University of Timisoara)

  • Crișan ALBU

    (The Bucharest Academy of Economic Studies)

  • Cristina STANCIU – MANDRULEANU

    (The Bucharest Academy of Economic Studies)

  • Robert PANAIT

    (The Bucharest Academy of Economic Studies)

Abstract

The objective of this study is to provide empirical evidence regarding the impact of financial crisis on companies’ financing preference and economic performance. In order to highlight this objective the data was organized in two different panels consisting of performance determinants in 79 different-sized companies (large and SMEs), listed on the Bucharest Stock Exchange over the period 2003-2014. Both panels were also divided in two sub-periods, before and after 2007, when the crisis was triggered in Romania. The main results obtained in the comparative regression analysis indicate that large companies register higher returns when they operate with limited borrowings, while small companies tend to perform better when they have higher debt ratios in the capital structure. The financial crisis affected the corporate performance and companies had to change their financing activity in order to minimize financial risks, avoiding borrowed funds.

Suggested Citation

  • Nicoleta-Claudia MOLDOVAN & Sorana VĂTAVU & Crișan ALBU & Cristina STANCIU – MANDRULEANU & Robert PANAIT, 2016. "Corporate Financing Decisions and Performance in Times of Crisis: Threat or Challenge?," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 50(2), pages 59-78.
    • Handle: RePEc:cys:ecocyb:v:50:y:2016:i:2:p:59-78
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    References listed on IDEAS

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    Cited by:

    1. Feras Izzat Kasasbeh, 2021. "Impact of financing decisions ratios on firm accounting-based performance: evidence from Jordan listed companies," Future Business Journal, Springer, vol. 7(1), pages 1-10, December.
    2. Mihai Precup, 2019. "Challenges to Scaling Sustainable Private Equity Markets in Emerging Europe," Sustainability, MDPI, vol. 11(15), pages 1-16, July.

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    More about this item

    Keywords

    performance; capital structure; financial crisis; large companies; SMEs.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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