Economic Determinants of Romanian Firms’ Financial Performance

Abstract

One of the central questions in entrepreneurship is why some firms succeed and others fail. Determining what factors influence performance has implications for prospective entrepreneurs, as well as advisors, investors, managers and so forth. Thus, using extensive data over a period of 14 years, this study explores and tests the sign of the relationship between microeconomic factors and financial performance. The dataset includes 55 Romanian industrial companies listed at the Bucharest Stock Exchange and covers the period of 1999-2012. Through a panel data analysis, results indicate that the sign of the relationship is positive and statistically significant; supporting the importance and independence of the sets of factors in explaining performance.