engleski

Factors affecting growth potential of Croatian firms

The paper provides some tentative observations on the relationship of firm size to industrial dynamics and national competitiveness. By observing changes in average firm size in a five year period, we search for explanations that can relate a falling average firm size with a rising GDP, a fact which contradicts general expectation. The most likely conclusion is that a period of steady economic growth has attracted new entrepreneurship thus causing the average firm size to decrease. At the same time, exposure to international competitive pressures raised the investment activity which led to an increase in labor productivity, which was able to compensate for eventual diseconomies of scale.

firm size; competitiveness; theory of firm; Croatia

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