Does privatization in transitional countries influence enterprise efficiency growth: A case of Croatia and Slovenia

Abstract

This paper explores the impact of privatization on the efficiency growth of enterprises in two transitional countries, which did not follow the same privatization model. The aim of this research is to analyze the effects of privatization on micro and macroeconomic indicators. Research will be based on ten-year time-series analysis, using both financial and other indicators. Particular emphasis will be placed on efficiency and profitability growth by analyzing separately large, medium and small enterprises. The expressed hypotheses, which will be tested through statistical data analysis, are related to the statement that the privatization model utilize did not contribute to the efficiency of the entire economy. However, it did contribute to the efficiency of particular segments of enterprises. The second hypothesis is that the recent growth of small business efficiency will decrease while medium and large enterprise efficiency will increase. Finally, the third hypothesis is related to the impact of enterprises performance in ten years period on macroeconomic indicators.The development of small business in both countries in the early years of transition will be examined. During this time of period, small businesses tended to experience more efficiency growth than other enterprises. However, there currently appears to be a shift in efficiency and profitability growth to medium and large enterprises. Therefore, another aim of this research is to determine what factors may have caused these differences and lead to the opinion about future efficiency growth in countries in transition.