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FEATURES AND DETERMINANTS OF INVESTMENT IN LONG-LASTING TANGIBLES OF CROATIAN MANUFACTURING INDUSTRIES

Proceedings of FEB Zagreb International Odyssey Conference on Economics and Business, 2022, Vol.4 (1), p.382-390

Copyright University of Zagreb, Faculty of Economics and Business Jun 2022 ;ISSN: 2671-132X

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  • Title:
    FEATURES AND DETERMINANTS OF INVESTMENT IN LONG-LASTING TANGIBLES OF CROATIAN MANUFACTURING INDUSTRIES
  • Author: Šetić, Emil ; Dimitrić, Mira
  • Subjects: Business metrics ; Econometrics ; Economic development ; Efficiency ; Employees ; Exports ; Fixed assets ; GDP ; Gross Domestic Product ; Industrial production ; Manufacturing ; Pandemics ; Trends ; Variables
  • Is Part Of: Proceedings of FEB Zagreb International Odyssey Conference on Economics and Business, 2022, Vol.4 (1), p.382-390
  • Description: This paper addresses the basic characteristics of the manufacturing sector in Croatia and the determinants of investment in durable fixed assets as a prerequisite for its survival and development. The manufacturing industry is an important segment of the national economy, as its characteristics have the potential to achieve a significant share of GDP, exports and employment. The development over the last five years, using Croatia as an example, shows that despite certain fluctuations, the number of companies and employment in the manufacturing industry remain constant, as do the level of fixed assets and equity sources of financing. Since continuous investment in long-lasting tangibles, fixed assets is a prerequisite for the survival and competitiveness of manufacturing firms, this paper examines the determinants of such investment. The aim was also to compare the results of the econometric analysis conducted on a sample of Croatian companies over a period of five years with the expectations arising from previous research. Thus, the expected positive impact of firm size, asset efficiency, exports and the value of capital on additional investment in fixed assets was confirmed. On the other hand, the expected positive impact of current liquidity and performance indicators, as well as the expected negative impact of debt on additional investment in fixed assets, were not confirmed. It can be assumed that under the conditions of high indebtedness of Croatian companies and financing of additional investments through debt, which increases the cost of financing, there will be a negative impact on performance indicators and current liquidity. This is especially true if the additional investments do not yield the expected benefits. Thus, the return variables of debt, performance indicators and current liquidity have a sign opposite to expectations.
  • Publisher: Zagreb: University of Zagreb, Faculty of Economics and Business
  • Language: English
  • Identifier: ISSN: 2671-132X
  • Source: ProQuest Central
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