IDEAS home Printed from https://ideas.repec.org/p/inf/wpaper/2018.09.html
   My bibliography  Save this paper

Productivity, Financial Performance, and Corporate Governance: Evidence from Romanian R&D Firms

Author

Listed:
  • Claudiu T. Albulescu

    (Management Department, Politehnica University of Timisoara, Romania)

  • Camelia Turcu

    (Université d’Orléans, CNRS, LEO, FRE 2014)

Abstract

We study the impact of financial performance and corporate governance on the productivity of the Romanian Research and Development (R&D) sector. We draw on a dataset consisting of 116 Romanian R&D companies covering the time span from 2007 to 2016. Firm productivity is computed using several metrics of TFP (total factor productivity). We show, based on bootstrap panel quantile regressions, that size, financial profitability, and foreign ownership are key drivers of R&D companies’ productivity. Intangible assets and taxation have no significant effect on R&D firms’ productivity, while the degree of independence in decision-making and owners’ presence in firms’ management negatively impact TFP. With women on the board, state-owned applied research institutes benefit from higher productivity compared with R&D private firms, if they are in lower quantiles.

Suggested Citation

  • Claudiu T. Albulescu & Camelia Turcu, 2018. "Productivity, Financial Performance, and Corporate Governance: Evidence from Romanian R&D Firms," Working Papers 2018.09, International Network for Economic Research - INFER.
    • Handle: RePEc:inf:wpaper:2018.09
    as

    Download full text from publisher

    File URL: https://infer-research.eu/wp-content/uploads/2020/10/WP2018.09a.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Devereux, Michael P & Griffith, Rachel, 2003. "Evaluating Tax Policy for Location Decisions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 10(2), pages 107-126, March.
    2. Nina Smith & Valdemar Smith & Mette Verner, 2006. "Do women in top management affect firm performance?A panel study of 2,500 Danish firms," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 55(7), pages 569-593, October.
    3. Slavo Radosevic, 2017. "Upgrading technology in Central and Eastern European economies," IZA World of Labor, Institute of Labor Economics (IZA), pages 338-338, February.
    4. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    5. Marialuisa Divella & Alessandro Sterlacchini, 2020. "Public procurement for innovation: firm-level evidence from Italy and Norway," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(6), pages 1505-1520.
    6. Minniti, Antonio & Venturini, Francesco, 2017. "R&D policy, productivity growth and distance to frontier," Economics Letters, Elsevier, vol. 156(C), pages 92-94.
    7. Coe, David T. & Helpman, Elhanan & Hoffmaister, Alexander W., 2009. "International R&D spillovers and institutions," European Economic Review, Elsevier, vol. 53(7), pages 723-741, October.
    8. Yu, Xiaodan & Dosi, Giovanni & Grazzi, Marco & Lei, Jiasu, 2017. "Inside the virtuous circle between productivity, profitability, investment and corporate growth: An anatomy of Chinese industrialization," Research Policy, Elsevier, vol. 46(5), pages 1020-1038.
    9. Slavo Radosevic & Esin Yoruk, 2014. "Are there global shifts in the world science base? Analysing the catching up and falling behind of world regions," Scientometrics, Springer;Akadémiai Kiadó, vol. 101(3), pages 1897-1924, December.
    10. William Sheng Liu & Frank Wogbe Agbola & Janet Ama Dzator, 2016. "The impact of FDI spillover effects on total factor productivity in the Chinese electronic industry: a panel data analysis," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(2), pages 217-234, April.
    11. Chen, Minjia & Guariglia, Alessandra, 2013. "Internal financial constraints and firm productivity in China: Do liquidity and export behavior make a difference?," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1123-1140.
    12. Zizi goschin, 2014. "R&D As An Engine Of Regional Economic Growth In Romania," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 8(1), pages 24-37, JUNE.
    13. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    14. Boeing, Philipp & Mueller, Elisabeth & Sandner, Philipp, 2016. "China's R&D explosion—Analyzing productivity effects across ownership types and over time," Research Policy, Elsevier, vol. 45(1), pages 159-176.
    15. Annalisa Ferrando & Alessandro Ruggieri, 2018. "Financial constraints and productivity: Evidence from euro area companies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 23(3), pages 257-282, July.
    16. Jeffrey Kukulski & Michael Ryan, 2011. "Investment History and Market Orientation Effects in the TFP–FDI Relationship," The World Economy, Wiley Blackwell, vol. 34(4), pages 546-567, April.
    17. Andreas Savvides & Marios Zachariadis, 2005. "International Technology Diffusion and the Growth of TFP in the Manufacturing Sector of Developing Economies," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 482-501, November.
    18. Pornsit Jiraporn & Sang Mook Lee, 2018. "How do Independent Directors Influence Corporate Risk‐Taking? Evidence from a Quasi‐Natural Experiment," International Review of Finance, International Review of Finance Ltd., vol. 18(3), pages 507-519, September.
    19. Bournakis, Ioannis & Mallick, Sushanta, 2018. "TFP estimation at firm level: The fiscal aspect of productivity convergence in the UK," Economic Modelling, Elsevier, vol. 70(C), pages 579-590.
    20. Kancs, d’Artis & Siliverstovs, Boriss, 2016. "R&D and non-linear productivity growth," Research Policy, Elsevier, vol. 45(3), pages 634-646.
    21. Min‐Hsien Chiang & Jia‐Hui Lin, 2007. "The Relationship between Corporate Governance and Firm Productivity: evidence from Taiwan's manufacturing firms," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 768-779, September.
    22. Antonio F. Galvao & Gabriel Montes-Rojas, 2015. "On Bootstrap Inference for Quantile Regression Panel Data: A Monte Carlo Study," Econometrics, MDPI, vol. 3(3), pages 1-13, September.
    23. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna & Guidi, Francesco, 2016. "R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis," Research Policy, Elsevier, vol. 45(10), pages 2069-2086.
    24. Sophia P. Dimelis & Sotiris K. Papaioannou, 2016. "Entry Regulation, Public Ownership and TFP Growth: Industry-Level Evidence from South European Countries," Manchester School, University of Manchester, vol. 84(6), pages 749-770, December.
    25. Oliner, Stephen D. & Sichel, Daniel E., 2003. "Information technology and productivity: where are we now and where are we going?," Journal of Policy Modeling, Elsevier, vol. 25(5), pages 477-503, July.
    26. Era Dabla-Norris & Erasmus K. Kersting & Geneviève Verdier, 2012. "Firm Productivity, Innovation, and Financial Development," Southern Economic Journal, John Wiley & Sons, vol. 79(2), pages 422-449, October.
    27. Ilmakunnas, Pekka & Miyakoshi, Tatsuyoshi, 2013. "What are the drivers of TFP in the Aging Economy? Aging labor and ICT capital," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 201-211.
    28. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
    29. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    30. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    31. Michael Pfaffermayr, 1999. "Ownership Advantages, Foreign Production and Productivity: Evidence from Austrian Manufacturing Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(4), pages 379-396, December.
    32. Francesco Nucci & Alberto F. Pozzolo & Fabiano Schivardi, 2005. "Is Firm's Productivity Related to its Financial Structure? Evidence from Microeconomic Data," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 269-290, January-F.
    33. Minasian, Jora R, 1969. "Research and Development, Production Functions, and Rates of Return," American Economic Review, American Economic Association, vol. 59(2), pages 80-85, May.
    34. Richard Harris & John Moffat, 2015. "Total Factor Productivity Growth in Local Enterprise Partnership Regions in Britain, 1997-2008," Regional Studies, Taylor & Francis Journals, vol. 49(6), pages 1019-1041, June.
    35. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    36. Elena Bardasi & Shwetlena Sabarwal & Katherine Terrell, 2011. "How do female entrepreneurs perform? Evidence from three developing regions," Small Business Economics, Springer, vol. 37(4), pages 417-441, November.
    37. Helena Marques, 2015. "Does the Gender of Top Managers and Owners Matter for Firm Exports?," Feminist Economics, Taylor & Francis Journals, vol. 21(4), pages 89-117, October.
    38. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
    39. Jefferson, Gary H. & Rawski, Thomas G. & Li, Wang & Yuxin, Zheng, 2000. "Ownership, Productivity Change, and Financial Performance in Chinese Industry," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 786-813, December.
    40. Khachoo, Qayoom & Sharma, Ruchi & Dhanora, Madan, 2018. "Does proximity to the frontier facilitate FDI-spawned spillovers on innovation and productivity?," Journal of Economics and Business, Elsevier, vol. 97(C), pages 39-49.
    41. Zvi Griliches, 1958. "Research Costs and Social Returns: Hybrid Corn and Related Innovations," Journal of Political Economy, University of Chicago Press, vol. 66(5), pages 419-419.
    42. Steliana Sandu, 2010. "Main Issues of R&D Financing in Romania," Romanian Journal of Economics, Institute of National Economy, vol. 30(1(39)), pages 127-145, June.
    43. Michael Fritsch & Horst Brezinski (ed.), 1999. "Innovation and Technological Change in Eastern Europe," Books, Edward Elgar Publishing, number 1937.
    44. G. Kapetanios, 2008. "A bootstrap procedure for panel data sets with many cross-sectional units," Econometrics Journal, Royal Economic Society, vol. 11(2), pages 377-395, July.
    45. Slavo Radosevic & Katerina Ciampi Stancova, 2015. "External dimensions of smart specialisation: Opportunities and challenges for trans-regional and transnational collaboration in the EU-13," JRC Research Reports JRC96030, Joint Research Centre.
    46. José Manuel González‐Páramo & Pablo Hernández De Cos, 2005. "The Impact of Public Ownership and Competition on Productivity," Kyklos, Wiley Blackwell, vol. 58(4), pages 495-517, November.
    47. Jens Matthias Arnold & Bert Brys & Christopher Heady & Åsa Johansson & Cyrille Schwellnus & Laura Vartia, 2011. "Tax Policy for Economic Recovery and Growth," Economic Journal, Royal Economic Society, vol. 121(550), pages 59-80, February.
    48. Francesco Aiello & Valeria Pupo & Fernanda Ricotta, 2014. "Explaining Total Factor Productivity at Firm Level in Italy: Does Location Matter?," Spatial Economic Analysis, Taylor & Francis Journals, vol. 9(1), pages 51-70, March.
    49. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    50. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    51. Peter N. Gal, 2013. "Measuring Total Factor Productivity at the Firm Level using OECD-ORBIS," OECD Economics Department Working Papers 1049, OECD Publishing.
    52. Paulo Bastos & Natália P. Monteiro & Odd Rune Straume, 2014. "The impact of private vs. public ownership on the level and structure of employment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(2), pages 247-280, April.
    53. Hahn, Jinyong, 1995. "Bootstrapping Quantile Regression Estimators," Econometric Theory, Cambridge University Press, vol. 11(1), pages 105-121, February.
    54. Eisemon, Thomas Owen & Ionescu-Sisesti, Ileana & Davis, Charles H. & Gaillard, Jacques, 1996. "Reforming Romania's national research system," Research Policy, Elsevier, vol. 25(1), pages 107-131, January.
    55. Pornsit Jiraporn & Sang Mook Lee & Kuen Jae Park & HakJoon Song, 2018. "How do independent directors influence innovation productivity? A quasi-natural experiment," Applied Economics Letters, Taylor & Francis Journals, vol. 25(7), pages 435-441, April.
    56. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    57. Hailin Liao & Xiaohui Liu & Mark Holmes & Tom Weyman‐Jones, 2009. "The Impact Of Foreign R&D On Total Factor Productivity In The East Asian Manufacturing Industry," Manchester School, University of Manchester, vol. 77(2), pages 244-270, March.
    58. Francesco Aiello & Valeria Pupo & Fernanda Ricotta, 2015. "Firm heterogeneity in TFP, sectoral innovation and location. Evidence from Italy," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(5), pages 579-607, September.
    59. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August.
    60. Di Cintio, Marco & Ghosh, Sucharita & Grassi, Emanuele, 2017. "Firm growth, R&D expenditures and exports: An empirical analysis of italian SMEs," Research Policy, Elsevier, vol. 46(4), pages 836-852.
    61. Venturini, Francesco, 2015. "The modern drivers of productivity," Research Policy, Elsevier, vol. 44(2), pages 357-369.
    62. Gaitán, Sandra & Herrera-Echeverri, Hernán & Pablo, Eduardo, 2018. "How corporate governance affects productivity in civil-law business environments: Evidence from Latin America," Global Finance Journal, Elsevier, vol. 37(C), pages 173-185.
    63. Hall, Bronwyn & Van Reenen, John, 2000. "How effective are fiscal incentives for R&D? A review of the evidence," Research Policy, Elsevier, vol. 29(4-5), pages 449-469, April.
    64. Radosevic, Slavo & Auriol, Laudeline, 1999. "Patterns of restructuring in research, development and innovation activities in central and eastern European countries: an analysis based on S&T indicators1," Research Policy, Elsevier, vol. 28(4), pages 351-376, April.
    65. Gaowen Kong & Dongmin Kong, 2017. "Corporate governance, human capital, and productivity: evidence from Chinese non-listed firms," Applied Economics, Taylor & Francis Journals, vol. 49(27), pages 2655-2668, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Claudiu Tiberiu Albulescu, 2024. "Total factor productivity and tax avoidance: An asymmetric micro-data analysis for European oil and gas companies," Working Papers 2024.15, International Network for Economic Research - INFER.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Claudiu Tiberiu Albulescu, 2024. "Total factor productivity and tax avoidance: An asymmetric micro-data analysis for European oil and gas companies," Working Papers 2024.15, International Network for Economic Research - INFER.
    2. Gornig, Martin & Schiersch, Alexander, 2019. "Agglomeration economies and firm TFP: different effects across industries," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203597, Verein für Socialpolitik / German Economic Association.
    3. Bournakis, Ioannis & Mallick, Sushanta, 2018. "TFP estimation at firm level: The fiscal aspect of productivity convergence in the UK," Economic Modelling, Elsevier, vol. 70(C), pages 579-590.
    4. Norman Gemmell & Richard Kneller & Danny McGowan & Ismael Sanz & José F. Sanz‐Sanz, 2018. "Corporate Taxation and Productivity Catch‐Up: Evidence from European Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(2), pages 372-399, April.
    5. Chen, Minjia & Matousek, Roman, 2020. "Do productive firms get external finance? Evidence from Chinese listed manufacturing firms," International Review of Financial Analysis, Elsevier, vol. 67(C).
    6. Markus Eberhardt & Christian Helmers & Hubert Strauss, 2013. "Do Spillovers Matter When Estimating Private Returns to R&D?," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 436-448, May.
    7. Christian Abele & Agnès Bénassy-Quéré & Lionel Fontagné, 2020. "One Size Does Not Fit All: TFP in the Aftermath of Financial Crises in Three European Countries," PSE Working Papers halshs-02883685, HAL.
    8. Kancs, d’Artis & Siliverstovs, Boriss, 2016. "R&D and non-linear productivity growth," Research Policy, Elsevier, vol. 45(3), pages 634-646.
    9. Themann, Michael & Koch, Nicolas, 2021. "Catching up and falling behind: Cross-country evidence on the impact of the EU ETS on firm productivity," Ruhr Economic Papers 904, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Lu, Yunguo & Zhang, Lin, 2022. "National mitigation policy and the competitiveness of Chinese firms," Energy Economics, Elsevier, vol. 109(C).
    11. Nguyen, Hang T. T., 2024. "Corporate taxation and total factor productivity: Evidence on a non-linear relationship," arqus Discussion Papers in Quantitative Tax Research 284, arqus - Arbeitskreis Quantitative Steuerlehre.
    12. He, Ming & Chen, Yang & van Marrewijk, Charles, 2021. "The effects of urban transformation on productivity spillovers in China," Economic Modelling, Elsevier, vol. 95(C), pages 473-488.
    13. Chiacchio, Francesco & Gradeva, Katerina & Lopez-Garcia, Paloma, 2018. "The post-crisis TFP growth slowdown in CEE countries: exploring the role of Global Value Chains," Working Paper Series 2143, European Central Bank.
    14. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1033-1082, Elsevier.
    15. Ioannis Bournakis & Sushanta Mallick & David Kernohan & Dimitris A.Tsouknidis, 2013. "Measuring Firm-Level Productivity Convergence in the UK: The Role of Taxation and R&D Investment," Working Papers 45, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    16. Jun Du & Yama Temouri, 2015. "High-growth firms and productivity: evidence from the United Kingdom," Small Business Economics, Springer, vol. 44(1), pages 123-143, January.
    17. Vujanović Nina, 2021. "Technological Trends in the Manufacturing and Service Sectors. The Case of Montenegro," South East European Journal of Economics and Business, Sciendo, vol. 16(1), pages 120-133, June.
    18. Dolores Añón Higón & Juan A. Máñez & María E. Rochina-Barrachina & Amparo Sanchis & Juan A. Sanchis, 2022. "Firms’ distance to the European productivity frontier," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(2), pages 197-228, June.
    19. Castellani, Davide & Piva, Mariacristina & Schubert, Torben & Vivarelli, Marco, 2019. "R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 279-291.
    20. Stucki, Tobias & Woerter, Martin, 2019. "The private returns to knowledge: A comparison of ICT, biotechnologies, nanotechnologies, and green technologies," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 62-81.

    More about this item

    Keywords

    productivity; R&D sector; corporate finance and governance; panel quantiles regression; Romania;
    All these keywords.

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • D - Microeconomics
    • G - Financial Economics
    • O - Economic Development, Innovation, Technological Change, and Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inf:wpaper:2018.09. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Pedro Cerqueira (email available below). General contact details of provider: https://edirc.repec.org/data/inferea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.