The Impact of EU Membership on the Financial Performance of Business Firms in Central and Eastern Europe

Authors

  • G. Rod Erfani
  • Tonmoy Islam

DOI:

https://doi.org/10.14276/2285-0430.1949

Abstract

This paper examines how European Union (EU) membership impacts the financial performance of business firms in the emerging economies of Central and Eastern Europe. In 2004, the European Union welcomed ten additional members: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. This was the largest enlargement in the history of the European Union. This study examines whether business firms from those ten countries improved their financial performance since joining the EU. It intends to empirically demonstrate that the profitability of the business firms increased since the ten countries joined the EU. Quarterly data on assets, short and long term liabilities, and common equity were collected. Data was collected for the period 2001- 2009. Econometric methods were used to determine the efficiency and profitability of these companies. The results of this study indicate that the companies benefited from joining the European Union.

Keywords: Financial Performance, Financial Ratios, Efficiency, Profitability, European Union

 

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Published

28.06.2012