The Impact of Corporate Governance on Romanian Stock Performance

Maria-Lenuţa Ciupac-Ulici (), Renate Bratu (), Daniela-Georgeta Beju () and Vasile Paul Bresfelean ()
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Maria-Lenuţa Ciupac-Ulici: IPAG Business School
Renate Bratu: Lucian Blaga University of Sibiu
Daniela-Georgeta Beju: Babeș-Bolyai University
Vasile Paul Bresfelean: Babeș-Bolyai University

A chapter in Advancements in Sustainable Development, 2025, pp 159-176 from Springer

Abstract: Abstract Establishing effective corporate governance is key to fostering microeconomic efficiency. There is a direct correlation between its effects on resource allocation and the maturation and operation of financial markets. The sample used for this analysis consists of 48 companies listed on the Bucharest Stock Exchange. The studied period spans from 2015 to 2021, with a total of 322 observations. The data used in the study are annual reports from the companies that were analyzed, as well as data obtained from the Bucharest Stock Exchange website, Eikon, and Thomson Reuters. The study makes use of panel data and the Generalized Method of Moments. We found some results that don’t match up with what’s already in the financial literature. Stock market price and Price/sales ratio are negatively and significantly affected by the corporate governance score. We observed a negative and negligible effect on ROE, company value, net profit margin, and stock market capitalization. One reason for the negative impact is that the studied period encompasses the COVID pandemic, which caused a significant drop in the share prices of the companies included and also caused some of them to incur financial losses.

Keywords: Corporate governance; Stock market; Performance indicators (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/978-3-031-86337-0_10

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