Recovery after Demerger: Evidence from Romanian Companies

The paper follows the demerger phenomenon in Romania in order to find out whether companies regain their economic performance after reorganization. The research is based on four samples of companies, divided into 2012, 2013, 2014, and 2015, that recorded their financial indicators in the period from...

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Bibliographic Details
Published in:Sustainability 2022-02, Vol.14 (3), p.1151
Main Authors: Duguleana, Constantin, Duguleana, Liliana, Baba, Camelia Mirela, Drumea, Cristina
Format: Article
Language:English
Subjects:
Core competencies
Econometrics
Economic activity
Economic crisis
Indicators
Innovations
Literature reviews
Longitudinal studies
R&D
Research & development
Securities markets
Statistical methods
Sustainability
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Summary:The paper follows the demerger phenomenon in Romania in order to find out whether companies regain their economic performance after reorganization. The research is based on four samples of companies, divided into 2012, 2013, 2014, and 2015, that recorded their financial indicators in the period from 2005–2019. Using the financial indicators of companies that demerged in the same year, we analyzed the economic performances before and after the demergers, using statistical and econometric methods. The model with the fixed effects of the cross sections proved to be the most suitable for each panel, both for the entire analyzed period and for the two subperiods: ante and post demerger. The subperiod models are better than the panel econometric models for the entire period. The results show that all of the Romanian companies recovered after the demergers, and also to what extents. The validities of the econometric models confirm the sustainability of the economic activities after the demergers. This paper provides a study methodology and econometric models to investigate the demerger phenomenon among Romanian companies.
ISSN:2071-1050
2071-1050
DOI:10.3390/su14031151