IDEAS home Printed from https://ideas.repec.org/a/rfe/zbefri/v36y2018i1p337-354.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://www.efri.uniri.hr/upload/Zbornik_1_2018_2verzija/14-Skuflic-Mlinaric-Druzic-2018-1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anita M. McGahan & Michael E. Porter, 2002. "What Do We Know About Variance in Accounting Profitability?," Management Science, INFORMS, vol. 48(7), pages 834-851, July.
    2. Simon Feeny, 2000. "Determinants of Profitability: An Empirical Investigation Using Australian Tax Entities," Melbourne Institute Working Paper Series wp2000n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Paulo J. Maçãs Nunes & Zélia M. Serrasqueiro & Tiago N. Sequeira, 2007. "Profitability in Portuguese service industries: a panel data approach," The Service Industries Journal, Taylor & Francis Journals, vol. 29(5), pages 693-707, May.
    4. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    5. repec:bla:ecorec:v:75:y:1999:i:229:p:115-26 is not listed on IDEAS
    6. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    8. Ravenscraft, David J, 1983. "Structure-Profit Relationships at the Line of Business and Industry Level," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 22-31, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Katarzyna Chudy-Laskowska & Sabina Rokita, 2024. "Profitability of Energy Sector Companies in Poland: Do Internal Factors Matter?," Energies, MDPI, vol. 17(20), pages 1-28, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manthos D. Delis & Sotirios Kokas & Steven Ongena, 2016. "Foreign Ownership and Market Power in Banking: Evidence from a World Sample," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(2-3), pages 449-483, March.
    2. Manthos D. Delis & K. Christos Staikouras & Panagiotis T. Varlagas, 2008. "On the Measurement of Market Power in the Banking Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(7‐8), pages 1023-1047, September.
    3. Kebewar, Mazen & Shah, Syed Muhammad Noaman Ahmed, 2013. "The effect of debt on corporate profitability: Evidence from French service sector," EconStor Preprints 73556, ZBW - Leibniz Information Centre for Economics.
    4. Henriques, Irene & Sadorsky, Perry, 2011. "The effect of oil price volatility on strategic investment," Energy Economics, Elsevier, vol. 33(1), pages 79-87, January.
    5. Ibrahim Abidemi Odusanya & Olumuyiwa Ganiyu Yinusa & Bamidele M. Ilo, 2018. "Determinants of Firm Profitability in Nigeria: Evidence from Dynamic Panel Models," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 68(1), pages 43-58, January-M.
    6. Polemis, Michael L., 2016. "New evidence on the impact of structural reforms on electricity sector performance," Energy Policy, Elsevier, vol. 92(C), pages 420-431.
    7. Mazen Kebewar & Ahmed Shah Syed Muhammad Noaman, 2013. "The effect of debt on corporate profitability Evidence from French service sector," Working Papers halshs-00825178, HAL.
    8. Pierpaolo Pattitoni & Barbara Petracci & Massimo Spisni, 2014. "Determinants of profitability in the EU-15 area," Applied Financial Economics, Taylor & Francis Journals, vol. 24(11), pages 763-775, June.
    9. Cassiman, Bruno & ,, 2013. "Profiting from Innovation: Firm Level Evidence on Markups," CEPR Discussion Papers 9703, C.E.P.R. Discussion Papers.
    10. Alessandro Sembenelli & Georges Siotis, 2002. "Foreign Direct Investment, Competitive Pressure and Spillovers. An Empirical Analysis on Spanish Firm Level Data," Development Working Papers 169, Centro Studi Luca d'Agliano, University of Milano.
    11. Kebewar, Mazen, 2012. "L’impact de l’endettement sur la profitabilité. Une étude empirique sur données françaises en panel [The impact of debt on profitability. An empirical study on French data panel]," EconStor Preprints 73692, ZBW - Leibniz Information Centre for Economics.
    12. Sabien Dobbelaere & Mark Vancauteren, 2014. "Market imperfections, skills and total factor productivity : Firm-level evidence on Belgium and the Netherlands," Working Paper Research 267, National Bank of Belgium.
    13. Kebewar, Mazen, 2013. "Does debt affect profitability? An empirical study of French trade sector," EconStor Preprints 73185, ZBW - Leibniz Information Centre for Economics.
    14. Mariacristina Piva & Marco Vivarelli, 2007. "Is demand-pulled innovation equally important in different groups of firms?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 31(5), pages 691-710, September.
    15. Kebewar, Mazen, 2012. "La structure du capital et la profitabilité : Le cas des entreprises industrielles françaises [Capital structure and profitability : The case of French industrial firms]," MPRA Paper 42899, University Library of Munich, Germany.
    16. Kebewar, mazen, 2012. "L’Endettement Affecte-T-Il La Profitabilité? Le Cas Des Firmes Agro-Alimentaires Françaises [Does Debt Affect Profitability? The Case Of French Agro-Food Firms]," MPRA Paper 42834, University Library of Munich, Germany.
    17. Mazen Kebewar, 2013. "The effect of Debt on Corporate Profitability :Evidence from French Service Sector," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 56(1), pages 43-59.
    18. Esperanza Gracia, 1999. "Márgenes y cuotas de mercado. Un análisis con un micropanel," Investigaciones Economicas, Fundación SEPI, vol. 23(3), pages 393-428, September.
    19. Rakesh Basant & Pulak Mishra, 2019. "Impact of Vertical Integration on Market Power in Indian Manufacturing Sector During the Post-Reform Period," Journal of Industry, Competition and Trade, Springer, vol. 19(4), pages 561-581, December.
    20. Basant, Rakesh & Mishra, Pulak, 2017. "Vertical Integration, Market Structure and Competition Policy: Experiences of Indian Manufacturing Sector during the Post Reform Period," IIMA Working Papers WP 2017-09-02, Indian Institute of Management Ahmedabad, Research and Publication Department.

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    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:rfe:zbefri:v:36:y:2018:i:1:p:337-354. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Danijela Ujcic (email available below). General contact details of provider: https://edirc.repec.org/data/efrijhr.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.