REGIONAL COOPERATION AND ECONOMIC INTEGRATION

CEFTA-2006 AND ANHANCING COMPETITIVENESS OF THE REGION - SOME SECTORAL ASPECTS
had higher export intensity than high performing companies. As the theory suggests, the
relationship between export intensity and productivity depends on the structure and value
of exports and the level of income of importing country (Crinò and Epifani, 2008).
The findings of one-way ANOVA show that no significant differences existed among the
two firm types in new product development expenses (p=0.95) and training expenses
(p=0.15). Low levels of investments in new product development and training activities in
the Croatian manufacturing industry may explain these findings.
CONCLUSION
This paper explored the relationships between firms’ characteristics, firm’s strategic
behavior and their performance in the Croatian manufacturing industry. Performance was
measured as productivity (measured as value added per employee). Our first contribution is
the identification of the impacts of firms’ characteristics on productivity. The results indicate
that company size, technological intensity and firms’ experience do affect the performance
differences. Accordingly, more small companies were found to have high productivity
than medium-sized and large companies. High performing companies had higher levels of
technological intensity. A higher percentage of younger companies appeared to have higher
productivity than older companies. On the other hand, low performing companies were
mostly medium-sized companies and large companies, had lower levels of technological
intensity and were older companies according to their age of operation.
Our second contribution is the identification of the relationship between firms’ strategic
behavior and their productivity. Several factors were identified to contribute to productivity.
As compared to low performing companies, high performing companies are companies
that reported higher expenses per employee, higher monthly wages and higher marketing
intensity. They exhibited higher capital intensity. High performing companies had higher
volume of sales per employee and higher levels of profit per employee. Interestingly
enough, high performing companies were found to have lower export intensity, while
differences in new product development expenses and training expenses were not found to
be statistically significant.
The findings of this paper have implications for the design of the Croatian development
strategy of the manufacturing industry and the formulation of the policy measures targeted
towards enhancing the competitiveness of the manufacturing industry. The strategy should
take into consideration the repositioning of the manufacturing industry according to
changing market environments and the EU strategic documents. Policy measures should
among others focus on creating more favorable investment and business environments
in which manufacturing firms would invest more in technology, marketing and human
resources, and seek to increase the levels of capital intensity. Those factors have been
identified as being important for achieving higher levels of productivity. Since investments
in R&D and new product development are overall considerably low as compared to
international benchmarks, the policy measures should additionally put more efforts on
those issues. According to the EU standards and guidelines, those identified measures
might be realized by using horizontal and regional state aids.
Furthermore, several managerial implications might be derived from the findings of this
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