The Competitiveness of the Croatian Economy: A Comparison of Private and Public Sector Enterprises

A number of comparative international indicators point at the substantial weakness of the Croatian economy in terms of international competitiveness. A general weakness of governance in the public sector is also reflected in the governance of state-owned enterprises (SOEs), as there is no substantial difference between political behaviours in terms of public policies and in terms of enterprises management and oversight. This chapter will review the main results of international comparisons and present the results of a number of studies of market dynamics (entry and exit) and company productivity. Building on this review, the empirical part of the work will analyse financial statements of the top 1000 Croatian companies segmented according to ownership structure. A comparison of a number of financial and supplementary indicators will be used in order to identify statistically significant differences between different ownership clusters, including 100% and majority government-owned (SOE), mixed (minority government-owned) and private.