This paper examines the association between gender diversity on corporate boards and firm performance for a European emerging market, which lags behind in terms of both corporate governance quality and social cohesion indicators. In a sample of Romanian companies listed on BSE (Bucharest Stock Exchange) during 2012-2016, this study confirms previous concerns related to the endogeneity of gender diversity variables in firm performance regression analysis and shows that, on average, diversity has no significant impact on firm-performance. However, based on a sub-sample analysis, results show a robust association in the case of profit-firms and those listed on the Standard tier. As losses can be construed as a distortion factor and Standard tier companies are the smallest and less well governed on the market, the results could be taken to suggest that Romanian listed companies do benefit from increasing gender diversity in the boardrooms, which could complement their rather poor corporate governance practices. Overall, the paper concludes that, in the context of an emerging market, policies aimed at increasing gender diversity in the boards appear to be financially viable and even beneficial for the major part of listed companies, balancing successfully the social cohesion and economic components of sustainable development.
In our country, the lease agreements are differently accounted at the tenant according to the used accounting reference system. Thus, in the case of entities applying the International Financial Reporting Standards, when the lease agreement is concluded, an asset is recognized in the form of a right of use in association with a debt. During the carrying out of the contract, the right of use is amortized, and the existence of the debt entails, in its turn, recognition of financial expenses and reimbursements. Instead, at the entities applying the accounting regulations compliant with the European directives, only the expenses incurred by the rents and possibly the debts related to the payable instalments provided in the lease agreement are recognized. Consequently, the information in the financial statements is not the same, and the indicators calculated based on them have, in their turn, different values.
The paper explores the benefits of global financial reporting models for developing countries, discussing the case of Romania, which, at the recommendations of the World Bank and the International Monetary Fund, exceeded the minimum requirements of the European Union, by imposing the full adoption of the International Financial Reporting Standards (IFRS) in individual financial statements of listed companies. Using regression analysis and decomposition techniques, the paper explores the evolution in value relevance of financial variables based on pre-(2009–2012) and post-(2014–2016) adoption samples, showing that after IFRS adoption financial information becomes significantly more relevant for equity valuations. We also provide empirical evidence showing that the degree of relevance for stock valuation, as well as the IFRS impact varies across types of firms. Overall, our findings tend to indicate the success of the financial reporting reform, which could be relevant for other jurisdictions facing similar decisions.
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