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Determinants of construction sector profitability in Croatia

Author

Listed:
  • Lorena Škufliæ

    (University of Zagreb, Faculty of Economics and Business, J. F. Kennedy Sq. 6, 10000 Zagreb, Croatia)

  • Danijel Mlinariæ

    (University of Zagreb, Faculty of Economics and Business, J. F. Kennedy Sq. 6, 10000 Zagreb, Croatia)

  • Marko Družiæ

    (University of Zagreb, Faculty of Economics and Business, J. F. Kennedy Sq. 6, 10000 Zagreb, Croatia)

Abstract

This paper examines the determinants of profitability for construction companies in Croatia. Sample includes more than 8678 construction companies covering the period from 2003 to 2014 what present 11 years of observation including Croatian milestone in joining to the European Union as well as global financial crises. The authors analyze theoretical background and use empirical research to investigate the relation between profitability and selected determinants like price cost margin, concentration index, growth, size, material costs and lagged profitability. Special remarks are given with review of construction sector importance for the growth of the Croatian economy and repercussions of global financial crises. According to that, for the empirical part of the article generalized method of moments for dynamic panel model has been used which has given significant results. Overall, the results have proved a strong relationship between company size, concentration index, growth, lagged profitability and profitability besides number of employees.

Suggested Citation

  • Lorena Škufliæ & Danijel Mlinariæ & Marko Družiæ, 2018. "Determinants of construction sector profitability in Croatia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 337-354.
    • Handle: RePEc:rfe:zbefri:v:36:y:2018:i:1:p:337-354
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    construction sector; profitability; Croatia; panel data analysis;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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