Abstract
This paper investigates corporate governance from a cross-country perspective and makes a comparison with Romania. There are studies that examine the corporate governance issues related to Romanian companies, but these studies provide only qualitative and descriptive accounts of the research topic, with limited cross-country analysis. The present paper complements the literature by producing a quantitative analysis of cross-country corporate governance and makes a comparison with Romania. For this purpose, a set of corporate governance indicators from a large sample of 39 advanced and developing countries was collected for the 2006–2020 period. In terms of corporate governance dimensions, it was found that Romania underperforms other developing countries in the dimensions of director liability and ownership and control, while it outperforms them in the dimensions of corporate transparency, disclosure, and shareholder rights. The results indicate that the stagnant corporate governance scores and the low development level of stock markets stand out as important business challenges for the country. The correlation and regression analyses show that stock market development is closely associated with corporate governance dimensions and, overall, corporate governance scores matter greatly for the economic growth of countries, such as Romania, which can benefit greatly from the improvement of corporate governance codes and practices in the private sector.
Highlights
Corporate governance matters greatly for the efficiency of different business sectors in various countries (Belloc 2012; Donaldson 2013)
This paper has examined the evolution of corporate governance performance in the case of Romania from a cross-country perspective
There are various studies that examine the evolution of corporate governance in Romania, including cross-country perspectives (Badulescu 2008; Busu 2015; Popescu et al 2015; Tofan and Cigu 2020)
Summary
Corporate governance matters greatly for the efficiency of different business sectors in various countries (Belloc 2012; Donaldson 2013). The authors found that the US firms outperform foreign firms on average and effect the markets value board and audit committee independence positively Overall, these studies show that examining corporate governance issues from a cross-country perspective and making comparisons with individual country cases can provide valuable findings on the relevant topics, with important business and policy implications. These studies show that examining corporate governance issues from a cross-country perspective and making comparisons with individual country cases can provide valuable findings on the relevant topics, with important business and policy implications In this context, the present paper aims to make a comparative analysis of the case of Romania in terms of corporate governance scores.
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