DO EU GRANTS HAVE AN IMPACT ON PROFITABILITY, SOLVENCY AND BALANCE SHEET STRUCTURE OF PRIVATE COMPANIRS? AN EMPIRICAL ANALYSIS ON ROMANIAN COMPANIES
DO EU GRANTS HAVE AN IMPACT ON PROFITABILITY, SOLVENCY AND BALANCE SHEET STRUCTURE OF PRIVATE COMPANIRS? AN EMPIRICAL ANALYSIS ON ROMANIAN COMPANIES
Andrei-Alexandru MOROŞAN
1 Faculty of Economics, Administration and Business “Ștefan cel Mare” University of Suceava, Romania
andrei.morosan@usm.ro
Abstract: In the European Union’s budget, significant amounts of funds are allocated to financing various development programs in the member countries. After the 2004-2007 enlargement, these facilities became essential instruments for supporting the new EU members. However, the results obtained vary greatly from one country to another, thus we see an orientation of the scientific community to analyzing and quantifying the impact that these non-reimbursable financing programs have on the economic environment and the attempt to explain the existing discrepancies. However, there is no consensus in the scientific literature, we find both articles that support the existence of a clear contribution of these nonreimbursable funds to supporting economic growth, and articles that conclude that European investment subsidies do not have the expected effects and the entire process of granting them should be reconsidered. Starting from this division of the scientific literature and from the fact that there are not many studies on this subject in Romania, in this paper we carried out an empirical analysis of a set of companies that benefited from non-reimbursable funds, in order to identify the changes that occurred at the enterprise level. Our analysis focuses on the annual financial statements, wanting to see if the absorbed European funds have effects on the profitability and balance sheet structure of the beneficiary enterprise. The results obtained show that there are some slight differences between the profitability indicators calculated for the two groups, but there are no notable improvements in balance sheet stability indicators. The absence of a notable impact on profitability indicators is slightly problematic, suggesting that accessing these non-reimbursable financing also involves certain additional costs that occur during the project monitoring period.
Keywords: European grants; economic development; profitability; solvency.
JEL Classification: F63; H25; P33; F15.
