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Corporate Governance Dimensions and Financial Structure of the Companies in European Developing Countries

Author

Listed:
  • Ionescu Alin

    (West University of Timisoara, Faculty of Economics and Business Administration)

  • Tudoreanu Petru

    (West University of Timisoara, Faculty of Economics and Business Administration)

Abstract

The main purpose of this article is to test the impact of corporate governance dimensions on financial structure of the companies. In this regard, using a dataset covering 26 European developing countries and based on the method of principal components analysis, we made five indices for main dimensions of corporate governance and one index in case of financial structure of the companies. The main dimensions related to corporate governance that were considered in this study are transparency, ownership structure and rights, corporate social responsibility, bureaucracy and corruption (crime). As well, financial structure was quantified using the main sources of finance and the percentages of firms that are using banks for a loan or for investments. Using the generalized linear model, the main output of the paper consist in fact that the most significant influence on financial structure index is exercise by dimensions like corruption (crime) and ownership structure and rights.

Suggested Citation

  • Ionescu Alin & Tudoreanu Petru, 2014. "Corporate Governance Dimensions and Financial Structure of the Companies in European Developing Countries," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 517-524, May.
    • Handle: RePEc:ovi:oviste:v:xiv:y:2014:i:2:p:517-524
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    More about this item

    Keywords

    corporate governance; financial structure;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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