The Effect of Board Characteristics on the Financial Performance: Evidence from Romania

EasyChair Preprint 1241

Abstract

This paper examines the impact of board structure (more precise the impact of the board size and the board independence) on the firm’s financial performance for a sample of 1,432 Romanian companies, in a time frame that range from 2008 to 2015. Based on different types of static panel data regressions: Pooled Ordinary Least Squares (OLS), Fixed Effects (FE), Random Effects (RE) and a corrective model (PCSE), the main results indicate the fact that between board size and firm performance is an inverse relationship and between board independence and firm performance is a direct relationship. A potential explanation for these results consists in the fact that, although the introduction of the corporate governance principles which regulate the structure of the board of directors has been achieved late, Romanian companies have succeeded in adopting and practicing the concept of good corporate practices.

Keyphrases: Board independence, Financial Performance, Romania, board size

@booklet{EasyChair:1241,
  author    = {Milena Jana Schank},
  title     = {The Effect of Board Characteristics on the Financial Performance: Evidence from Romania},
  howpublished = {EasyChair Preprint 1241},
  year      = {EasyChair, 2019}}