Sustainability, Vol. 18, Pages 95: Corporate Governance Mechanisms and Sustainable Financial Performance: Empirical Evidence from Romanian Listed Companies

Sustainability doi: 10.3390/su18010095

Authors:
Mariana Ciurel
Razvan-Mihai Dobrescu

Corporate governance plays a critical role in strengthening transparency and sustainable performance in emerging European markets. Romania offers a distinct context marked by concentrated ownership, uneven governance adoption and ongoing alignment with EU and OECD standards. Despite recent reforms, limited evidence exists on how governance mechanisms shape firm performance. This study examines the impact of board size, board independence, CEO duality, institutional ownership and audit committee independence on five performance indicators (ROA, ROE, EPS, NPM, PER) for Romanian listed companies between 2016 and 2024. Drawing on Agency, Stewardship, Resource Dependence and Stakeholder theories, this research tests hypotheses linking governance design to operational efficiency, shareholder returns and market valuation. Using an unbalanced panel and estimated GLS with panel-corrected standard errors, the analysis addresses heterogeneity, autocorrelation and cross-sectional dependence. Results show that board and audit independence, as well as institutional investors, improve operational performance, CEO duality yields mixed effects, while board size follows a non-linear pattern. Market valuation responds positively to stronger governance structures. The study offers the most comprehensive evidence to date for Romania and provides practical implications for firms and policymakers.

Source link

Mariana Ciurel www.mdpi.com