Abstract
The paper presents a complete analysis of the evolution of the profitability of some Romanian companies that decided to demerge in 2013. The sample of companies was analyzed with statistical and econometric methods of panel data, in the sub-periods before and after demerger: 2005-2013 and 2014-2019. The main objective of research was to find out if the organizational management strategy was beneficial for obtainingbetter economic and financial performance. The research results were extended to the population to characterize the financial situation of all Romanian companies in the same situation as those in the sample
Highlights
Companies often choose the partial division strategy for ensuring the sustainability of their economic activity
The paper presents a complete analysis of the evolution of the profitability of some Romanian companies that decided to demerge in 2013
The demerger decision may be caused by some economic shocks, such as the economic crisis that began in 2008
Summary
Companies often choose the partial division strategy for ensuring the sustainability of their economic activity. The financial performance of companies has been studied in numerous scientific articles, which have highlighted the positive influence of demerger on companies. Several studies have addressed the positive consequences of the mergers by evaluating financial performance before and after (Pazarskis et al, 2021; Pazarskis et al, 2018; Pantelidis et al, 2018), using ROA, ROE and Net Profit Margin indicators, and other ratios. The demergers are expected to have positive effects on the companies that have decided on the partial division. Managers expect by demerger the resumption of a new development of the company, by eliminating the accumulated negative synergies. This type of action takes place in the maturity phase of a company's life cycle
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
