IDEAS home Printed from
   My bibliography  Save this article

Croatian SMEs: Current Stage and Prospect


  • Ljiljana Viducic

    (University of Split)

  • Snjezana Pivac

    (University of Split)

  • Ana Rimac Smiljanic

    (University of Split)

  • Sandra Pepur

    (University of Split)


Small businesses in Croatia are recognized as a locomotive for economic restructuring and increase of rate of employment. Bank credits have become more accessible in Croatia for the SME sector following privatization by foreign banks, which now participate with more than 90 percent in total bank assets of the country. Although foreign banks had a positive impact on the domestic banking market they tended to prefer household and large scale enterprise lending. Besides creating an equity gap, especially for the earlier stage non-technology based SMEs, asymmetric information leads to imperfect lending (credit rationing) even for prospective SMEs with fast revenue growth. SMEs' role in banks lending decreases with bank size: small businesses have dominant place in small banks credit portfolio (cca 50% of credits). Furthermore, small business experience obstacles in assurance of appropriate bank finance. However, there is a trend among larger banks of paying greater attention to small businesses, as well as positive development in the variety of sources used for investment finance.

Suggested Citation

  • Ljiljana Viducic & Snjezana Pivac & Ana Rimac Smiljanic & Sandra Pepur, 2009. "Croatian SMEs: Current Stage and Prospect," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 12(4), pages 129-139, Spring.
  • Handle: RePEc:pep:journl:v:12:y:2009:i:4:p:129-39

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lisa Meulbroek, 2001. "The Efficiency of Equity-Linked Compensation: Understanding the Full Cost of Awarding Executive Stock Options," Financial Management, Financial Management Association, vol. 30(2), Summer.
    2. Ittner, Christopher D. & Lambert, Richard A. & Larcker, David F., 2003. "The structure and performance consequences of equity grants to employees of new economy firms," Journal of Accounting and Economics, Elsevier, vol. 34(1-3), pages 89-127, January.
    3. Rangarajan K. Sundaram, 2005. "On Rescissions in Executive Stock Options," The Journal of Business, University of Chicago Press, vol. 78(5), pages 1809-1836, September.
    4. Nohel, Tom & Todd, Steven, 2005. "Compensation for managers with career concerns: the role of stock options in optimal contracts," Journal of Corporate Finance, Elsevier, vol. 11(1-2), pages 229-251, March.
    5. Josh Lerner & Julie Wulf, 2007. "Innovation and Incentives: Evidence from Corporate R&D," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 634-644, November.
    6. Erik Lie, 2005. "On the Timing of CEO Stock Option Awards," Management Science, INFORMS, vol. 51(5), pages 802-812, May.
    7. John D. Lyon & Brad M. Barber & Chih-Ling Tsai, 1999. "Improved Methods for Tests of Long-Run Abnormal Stock Returns," Journal of Finance, American Finance Association, vol. 54(1), pages 165-201, February.
    8. Heron, Randall A. & Lie, Erik, 2007. "Does backdating explain the stock price pattern around executive stock option grants?," Journal of Financial Economics, Elsevier, vol. 83(2), pages 271-295, February.
    9. Lowry, Michelle & Murphy, Kevin J., 2007. "Executive stock options and IPO underpricing," Journal of Financial Economics, Elsevier, vol. 85(1), pages 39-65, July.
    10. Murphy, Kevin J., 2003. "Stock-based pay in new economy firms," Journal of Accounting and Economics, Elsevier, vol. 34(1-3), pages 129-147, January.
    11. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    12. Yermack, David, 1997. " Good Timing: CEO Stock Option Awards and Company News Announcements," Journal of Finance, American Finance Association, vol. 52(2), pages 449-476, June.
    13. Kedia, Simi & Rajgopal, Shiva, 2009. "Neighborhood matters: The impact of location on broad based stock option plans," Journal of Financial Economics, Elsevier, vol. 92(1), pages 109-127, April.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Finance ; Privatization;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pep:journl:v:12:y:2009:i:4:p:129-39. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Craig Everett). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.