Romania’s economy is made up of increasingly smaller-sized enterprises, with the passage of time not guaranteeing an increase in size, according to a paper on structural changes in Romania’s economy published by the National Bank of Romania (BNR).
‘In most instances, the enterprises stayed in the size class where they started. In the remaining cases, the rule was downsizing. Instances of enterprises amassing assets and workers with the passage of time are exceptions,’ reads the paper on structural changes in the Romanian economy in the first decades after the December 1989 Revolution written by Florian Neagu, Florin Dragu şi Adrian Costeiu.
It adds that there are increasingly more start-ups with balance sheets below 1,000 lei (around 210 euros).
‘The relative majority is held by companies with balance sheets of between 1,000 and 10,000 lei upon incorporation. Companies worth over 500 million lei in start-up capital were far and between in the past decade. For instance we have identified six such companies since 2008, four of which are the result of a significant or exclusive contribution of the Government (created by mergers), the 5th company was written off one year in business, while the sixth is a limited liability owned by a non-resident, with a share capital of 200 lei,’ the paper says.
While the corporations in Romania used to own 83 percent of non-financial assets in 1994, ownership in 2014 is just 42 percent, says BNR.
‘The same dynamic was noticeable in the case of staff size as well: small and medium-sized enterprises (SMEs) were hiring 20 percent of the total workforce in late 1994, but two decades later they were hiring 65 percent. Similar changes with a smaller impact were recorded in the contributions to the added value and business turnovers. The contribution of SMEs to the turnover became a majority (53 percent in 2014 as against 34 percent in 1994), but the contribution remained constant although the enterprises’ assets and workforce increased, shows the BNR paper.