Maja Pervan

Profit persistence and determinants of bank profitability in Croatia

The aim of this research was to determine the persistence of profit in an emerging banking sector of the Republic of Croatia. Most developing countries have experienced common changes within restructuring of the banking system and therefore, this issue has become crucial, especially after comparing poor empirical findings in these countries to the findings of developed countries. However, research related to this issue is non-existent in the Croatian banking sector. Moreover, among the few studies that were carried out on the territory of the Central and Eastern European banking markets, none of the studies have analysed the persistence of profit in terms of the Markov Chain stochastic process. In addition to the profit persistence analysis, authors defined and estimated a model that would enable the identification of the profitability determinants of Croatian banks. In this sense, the model incorporated three groups of profitability determinants: bank-specific, industry-specific and macroeconomic. The variables with a statistically significant impact on the profitability of banks were identified using a dynamic panel model, while the application of the Markov Chains stochastic process revealed that profit persistence was less likely to occur in banks with higher profit.

What Determines The Profitability of Companies: Case of Croatian Food and Beverage Industry

Abstract A company”s profitability has always attracted the attention of academics and practitioners interested in revealing the main factors that determine business success. Although profitability has been widely investigated in manufacturing industry as a whole, studies related to the individual sectors within this industry are fairly rare. This is especially true for the food and beverage industry. Accordingly, the aim of this paper was to investigate the factors that determine companies” profitability in the Croatian food and beverage industry during the period from 1999 to 2009. The results of the conducted dynamic panel analysis revealed negative and significant influence of company”s debt ratio on profitability; and significant positive influence of company”s size, concentration ratio and past performance on current profitability. Additionally, MES, risk, and asset turnover had no significant role in determining profitability.

The Influence of Age on Firm Performance: Evidence from the Croatian Food Industry

The question of whether larger (and/or older) firms are more profitable than their smaller counterparts has been in interest of numerous researchers for decades. Large amounts of theoretical as well as empirical research in different disciplines (economics, strategic management, finance) have been conducted in order to demystify this relationship. However, while some authors found a positive influence of firm size on its performance, the others found this relationship to be negative or non-existent. With regards to the firm age, the interest in this variable began to grow in parallel with the studies that included firm age as an explanatory factor in investigations of determinants of firm performance i.e. business success. Although some theoretical explanations regarding the higher/lower level of profitability achieved by older firms are offered, due to the scarcity of empirical researches, no Abstract

The Impact of M&A on Company Performance: Evidence from Croatia☆

Abstract In the recent years the importance and value of M&As have reached enormous proportions. However, while some studies reported beneficial influence of M&A on companies’ success, the others found this influence to be neutral or even negative. Furthermore, the majority of studies analysed M&A activity in USA and UK, therefore this paper aims to detect the consequences of M&A on the performance of companies operating within under-researched European area i.e. Croatia. The analysis was conducted on Croatian companies that were involved in M&A activity in period from 2008 to 2011. The obtained results clearly indicated statistically insignificant differences in target companies’ performances before and after M&A activity. The same results, i.e. statistically insignificant differences, were obtained even when performance of target companies (after acquisition) was compared to the peer companies. Finally, the results showed that despite the growing influence of foreign investors in Croatian economy, the majority of M&A activity was carried out by Croatian companies.

Inconsistency in Consumer Preferences: Some Interesting Insights

Abstract Traditional theory of preferences assumes that a consumer should be able to rank different alternatives according to the satisfaction or utility they provide. However, empirical findings originated by psychologists in 1970s and later revaluated by economists show some controversial results. A phenomenon that occurs when individuals choice (as a direct indicator of individuals preferences) between two alternatives is inconsistent with the way an individual ranks “selling” price of these alternatives (where price serves as an indirect indicator of his preferences) becomes known as a preference reversals. This research aims to shed a new light on the respective subject by revealing potential differences among individuals’ choice depending on their characteristics. In that manner the research provides an insight into individuals’ preferences depending on their gender and household income. Furthermore, in this experiment individuals were asked to express their attitude toward risk, hence it was considered interesting to confront the way the individuals perceive themselves with the way they actually act.