The Impact Of Productivity On Export And Domestic Performance Of Top 300 Croatian Exporters

This paper compares different productivity measures and explores their influence on export and domestic revenue of the largest 300 Croatian export companies. Twostep dynamic robust GMM panel regression analysis was conducted on the sample of Croatia's largest 300 companies according to export revenues generated in the period 2006-2015 based on the annual financial company data. The analysed productivity indicators were: total factor productivity, labour productivity, capital productivity, return on capital employed and return on assets. Results show that total factor productivity, capital productivity and return on assets have a positive effect on export revenues. Labour productivity does not generate significant effect on export revenue. On the other hand, all five indicators have a significant effect on domestic revenues. The purpose of this paper is twofold. It confirms the importance of productivity for success in exports of the top Croatian exporters, especially capital productivity. Consequently, it confirms the necessity of labour productivity increase due to labour-capital productivity nexus. Although the analysis is limited to a time period 2006-2015, it clearly depicts the effect of 2008 financial crisis on Croatian companies’ revenues in 2009.