Firm Growth Dynamics in Croatia after 2000
Proceedings of 7th International Conference «Economic Integration, Competition and Cooperation», 2-3 April, 2009, Opatija, University of Rijeka – Faculty of Economics, CD with Full papers
15 Pages Posted: 19 Mar 2013 Last revised: 22 May 2013
Date Written: April 2, 2009
The paper reports on an exploratory study, run as part of a broader research of international competitiveness of Croatian firms. It 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.
Keywords: firm size, competitiveness, theory of the firm, Croatia
JEL Classification: L11
Suggested Citation: Suggested Citation