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

Laurentiu Droj () and Gabriela Droj ()
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Laurentiu Droj: 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, 297-305

Abstract: This article contains the second part of the study “Financial sustainability for Romanian companies - European Structural Funds between inter-regional cohesion and division?” The first part of the study presented several aspects regarding the literature review, selection of the case study analysis of data based on simple statistical methods and several conclusions. This part of the study goes even deeper in the specialized literature presenting the new opinions regarding the efficiency and sustainability for usage of EU funding at the regional level. These opinions also signal several warning signs, especially when considering the increasing economic division between developed and less developed regions or regarding. Also was mentioned the dilemma between equity, which is ensured by the funding proposed to be delivered in the rural areas for ensuring the convergence policy and competitiveness which is obtained by investment high developed area in order to gain further growth. In order to establish the methodology, were analysed the most common approaches in assessing the efficiency of aid in general and European Structural Funds in particular: statistical data analysis, Social Accounting Matrix, Regionalized Hermin, Combined macro and regional model Applied Spatial New Economic Geography, GeoCells a multi-layered hierarchical automaton and Econometric methods. Since none of the studies were focused on the effects of EU funding over the private companies the authors tried to tackle this issue in the current study. Based on a database formed from 493 small and medium sized Romanian companies which directly benefitted from EU investment funding the authors decided to create, for the data analysis, a mixed methodology between the Spatial Data Analysis, Corporate finance and Econometrics. In order to solve the “dilemma” the paper through its case study assessed if there is a link between the efficiency of accessing European funds and the economic development of certain regions. This was done especially by comparing the efficiency of EU funded SMEs projects from well-developed counties with those located in less-developed counties, inside the same region.

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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Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2017:i:1:p:297-305

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