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The impact of corporate governance on the digitalization process: empirical evidence for the Romanian companies

Author

Listed:
  • Monica Violeta Achim

    (Babeṣ-Bolyai University)

  • Viorela-Ligia Văidean

    (Babeṣ-Bolyai University)

  • Andrada-Ioana Sabău Popa

    (Babeṣ-Bolyai University)

  • Lavinia-Ioana Safta

    (Babeṣ-Bolyai University)

Abstract

The aim of this paper is to investigate the impact of the quality of corporate governance and the level of digital investments. For this purpose, a sample of 66 Romanian nonfinancial companies listed on the Bucharest Stock Exchange (BSE) for the 2016–2020 period is used. The findings validate a positive relationship between the quality of corporate governance and the companies’ interest in digital matters, controlling for various other variables. More exactly, we find that a good quality of corporate governance (measured by the corporate governance score) determines more incentives for investing in digital technologies. In addition, the main patterns of the board structure (equilibrium between non-executive and executive members, independence of the members and presence of men within the board) are positively correlated with a high level of digital investments. Then, the presence of Nomination, Remuneration and Audit Committees together with a good and transparent dividend policy, as other patterns of corporate governance quality, are associated with a higher level of digitalization. Further, the more companies are publicly owned, the more inclined they are to digitalization. A successful governance is keen on investing in the IT department and continuously improving the programs, knowing the positive benefits will not seize to appear.

Suggested Citation

  • Monica Violeta Achim & Viorela-Ligia Văidean & Andrada-Ioana Sabău Popa & Lavinia-Ioana Safta, 2022. "The impact of corporate governance on the digitalization process: empirical evidence for the Romanian companies," Digital Finance, Springer, vol. 4(4), pages 313-340, December.
    • Handle: RePEc:spr:digfin:v:4:y:2022:i:4:d:10.1007_s42521-022-00058-6
    DOI: 10.1007/s42521-022-00058-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate governance; Digitalization; Board gender; Ownership’s structure;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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