FINANCIAL SUSTAINABILITY FOR ROMANIAN COMPANIES - EUROPEAN STRUCTURAL FUNDS BETWEEN INTER-REGIONAL COHESION OR DIVISION? PART I

Laurentiu Droj (), Ioan Gheorghe Tara () and Gabriela Droj ()
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Laurentiu Droj: University of Oradea, Faculty of Economics, Finance and Accounting Department, Oradea, Romania
Ioan Gheorghe Tara: University of Oradea, Faculty of Economics, Finance and Accounting Department, Oradea, Romania
Gabriela Droj: University of Oradea, Faculty of Building Construction, Cadastre and Architecture, Cadastre and Architecture Department, Oradea, Romania

Annals of Faculty of Economics, 2017, vol. 1, issue 1, 287-295

Abstract: The current article it is the first part of a study which is focusing on analysing the effects financial sustainability and efficiency, if these are influenced by EU funding. Since the issue of financial sustainability and efficiency in usage of European funding has again came into the attention of both the public and specialists. The main goal of the current paper is to study statistically if SMEs projects financed from European Union Structural Funds are sustainable and if these projects are having a net positive impact over their beneficiaries. In the same time, the article tackles the dilemma between cohesion, convergence and economic competitiveness. The current research was realized by analysing if inter-regional development differences are important or not, when accessing European funds. The case study is using data which was collected from the Government reports and EU statistical databases and it is only focusing Romanian SMEs located in the North-Western region of Romania. This region was selected since it is a mixt developed region with a huge economic contrast between well developed and lesser developed counties. These companies contracted development projects co-financed under the Regional Operational Programme. Taking into consideration the goals of this study the authors decided to use for its first part only corporate finance and statistical methods of analysis. The study concentrated over the evolution of several financial and economic indicators such as: Return on Equity, Economic efficiency, Number of employees and Solvency. The selected period is 2009-2015 in order to analyse the financial information published before and after the implementation of the investment projects. The article also will compare head to head the results in different counties of the above mentioned indicators and also will pair them for a much easier analysis: solvency vs value of fixed assets and economic efficiency vs number of employees.

Keywords: SME; Financial analysis; Absorption capacity; Foreign Aid; Efficiency; European structural Funds; Cohesion policy; economic efficiency (search for similar items in EconPapers)
JEL-codes: C58 D61 F35 F36 G30 O16 R15 (search for similar items in EconPapers)
Date: 2017
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