EXPLORING THE LINK BETWEEN IDIOSYNCRATIC AND FUNDAMENTAL INDICATORS. EVIDENCE ON CEE CORPORATE

This paper explores the link between idiosyncratic and fundamental dimensionsof the corporate finance within CEE countries. We elaborate a Vector Error CorrectionModel integrating both idiosyncratic and macro related indicators. We expect idiosyncraticvariables to be closely related to the macro fudamentals and we anticipate the sign of therelation. Conclusions regarding the long term relationship between these variables differ bycountry from the perspective of the way the macro related variables enter the cointegrationequations. The impact is different according to the peculiarities of the macroeconomicarchitecture.