Governance and enterprise restructuring in Southeast Europe: gross domestic product and foreign direct investments

Abstract

PurposeThe purpose of this paper is to examine corporate governance mechanisms' influence on governance and enterprise restructuring in Southeast Europe (Western Balkans) transition economies: Albania, Bosnia and Herzegovina, Croatia, Macedonia, Montenegro and Serbia. Hence, the basic hypothesis to test governance and enterprise restructuring is that it is influenced by gross domestic product and foreign direct investments dynamics.Design/methodology/approachThe econometric model used in this study is a regression model. Further, the estimation is based on data provided by the databases of the European Bank for Reconstruction and Development (EBRD) Transition report series, the World Bank Database and the National Banks' databases of the countries in Southeast Europe. The hypothesis is that the variable governance and enterprise restructuring is encouraged by movements in gross domestic product and especially foreign direct investments dynamics.FindingsIt is apparent that governance and enterprise restructuring advance through time due to imposed policies, as well as overall progress of the economies' gross domestic product and especially the influx of foreign direct investments.Originality/valueThis paper is a contribution to the research developing the business aspects of the Southeast Europe economy, as there is constant lack of scientific papers that deal with the specific issues of corporate governance and enterprise restructuring.