Are the Determinants of Markup Size Industry-Specific? The Case of Slovenian Manufacturing Firms

The aim of this paper is to identify factors that affect the pricing policy in Slovenian manufacturing firms in terms of the markup size and, most of all, to explicitly account for the possibility of differences in pricing procedures among manufacturing industries. Accordingly, the analysis of the dynamic panel is carried out on an industry-by-industry basis, allowing the coefficients on the markup determinants to vary across industries. We find that the oligopoly theory of markup determination for the most part holds for the manufacturing sector as a whole, although large variability in markup determinants exists across industries within the Slovenian manufacturing. Our main conclusion is that each industry should be investigated separately in detail in order to assess the precise role of markup factors in the markup-determination process.Industry, Manufacturing, Markup determinants, Slovenia

Are the determinants of markup size industry-specific? The case of Slovenian manufacturing firms

The aim of this paper is to identify factors that affect the pricing policy in Slovenian manufacturing firms in terms of the markup size and, most of all, to explicitly account for the possibility of differences in pricing procedures among manufacturing industries. Accordingly, the analysis of the dynamic panel is carried out on an industry-by-industry basis, allowing the coefficients on the markup determinants to vary across industries. We find that the oligopoly theory of markup determination for the most part holds for the manufacturing sector as a whole, although large variability in markup determinants exists across industries within the Slovenian manufacturing. Our main conclusion is that each industry should be investigated separately in detail in order to assess the precise role of markup factors in the markup-determination process

The Importance Of Performance Management Tools Usage For Surviving The Economic Crisis

The main objective of our research is to explore how using performance management (PM) tools impact the exit hazard of firms by considering a sample of Slovenian firms during the recent economic crisis. The paper finds that, when firm and industry characteristics are not accounted for, the firms that used PM tools in 2007 experienced around a 6 percentage points lower hazard of shutting down during the current economic crisis. Further, our study supports the view that firm size and age are more important determinants of a firms survival probability than the influence of using PM tools (and other firm characteristics) due to a strong and significant correlation between the use of PM tools and firm size and age

Firm specific determinants of markup ‐ the case of Slovenian manufacturing firms

Investigations of firms’ pricing decisions and performances have been twofold. While within the industrial organisation framework stress is placed on industry‐specific factors and the market power of firms within industries, various organisational theories emphasise the role of ‘soft’ factors in the determination of firms’ performance. The main thesis of our paper is that the size of a firm's markup can mostly be explained by the firm's productivity, capital and labour costs, as well as the firm's market power and organisational structure characteristics, when the external environment and industry membership is controlled for. Our objective is thus to explain firm‐level markups by a set of firm‐specific factors. The empirical analysis of markup determinants is based on a sample of Slovenian manufacturing firms (NACE 15–37) in the 1994–2003 period, applying panel data regression GLS model and ANOVA analyses. We find that, besides market share and cost factors, organisational structure change occurring after some threshold significantly increases markups. First Published Online: 14 Oct 201

Performance Measurement In Large Slovenian Companies: An Assessment Of Progress

The prevailing literature and empirical studies on management of organizational performance stress the increasing importance of non-financial performance measures and propose companies to implement some kind of integrated performance measurement system. The purpose of our study is to investigate the characteristics of performance measurement and management in large Slovenian companies, focusing also on the progress made in the 5-year period. The analysis is based on two surveys conducted in the spring 2003 and summer of 2008. We investigate what do companies understand by “successful performance”, what are the most and the least important performance measures for companies, and what performance measurement systems do companies use. By answering these questions we discuss the impact of our results on the future development and growth of firms. The research results show that large Slovenian companies consider “successful performance” mostly in terms of implementing the strategy, followed by pursuing the goals of the owners and achieving the goals of different stakeholders. Most large Slovenian companies perceive financial performance measures as more important than non-financial, although they claim they measure both perspectives of their business. Our research results also suggest that 68% of large Slovenian companies in our sample use balance scorecard or some other integrated performance measurement system. These findings are generally in line with the existing theory and empirical evidence from other countries. Our main conclusion is that the prevailing role of financial key performance indicators in large Slovenian companies is appropriate for monitoring the effects of the current financial crisis but if companies want to succeed in the long-run they have to base their decisions also on non-financial measures that enable monitoring of many important capabilities for achieving long-term strategic goals

Determinants Of Integrated Performance Measurement Systems Usage: An Empirical Study

Performance management literature has been advocating the balanced use of non-financial measures alongside traditional financial measures, possibly within integrated performance measurement systems, since the early 1990’s. The purpose of this paper is to explore how contextual factors (such as company size, industry, and market position), business objectives and knowledge about contemporary management tools influence the decision to implement Balanced Scorecard or similar integrated performance management systems. We tested our research propositions regarding the influence of these factors by using survey data and a logistic regression model. The study is based on a survey conducted in 2008 on a sample of 323 Slovenian companies. The sample consists of large, medium, and small firms from different industrial sectors, including manufacturing and service. Overall, our results confirm contextual factors, such as company size and industry, and knowledge about management tools as most important determinants of integrated performance measurement systems usage. Although market position and business objectives also receive some support for their influence, the results are generally weaker and more ambiguous

Performance ratios for managerial decision‐making in a growing firm

This paper investigates the impact of firms’ growth rate on various financial and non‐financial performance ratios. The study tests the hypothesis that variations in growth rates across firms relate to differences in the values of ratios of profitability, liquidity, current assets, and solvency, as well as the break‐even point, revenue per employee, average costs, labour costs, capital costs, capacity utilization, productivity and efficiency. In order to estimate the impact of growth on financial and non‐financial indicators while also accounting for unobservable individual effects of each firm, the study assesses several two‐way fixed effect panel models with regression analysis. Authors show that knowing the impact of growth rates on financial and non‐financial ratios gives managers of growing firms additional relevant information for making business decisions. First Publish Online: 09 Jun 201

Firm growth types and key macroeconomic aggregates through the economic cycle

The paper investigates the role and impact of different groups of firms according to their growth type on macroeconomic aggregates at various stages of the economic cycle based on the entire population of firms in Slovenia. The applied classification of growing and fast-growing firms is based on microeconomic theory. Results exhibit that despite larger year-to-year fluctuations, firms with growth towards their long-term equilibrium contributed most to macroeconomic aggregates, i.e. employment, capital and sales, especially in times of economic prosperity. Firms with growth that shifts them closer to their short-term equilibrium proved to be more important primarily for assuring employment stability. Furthermore, we show that using single growth measures prevents us from identifying all growing firms and capturing the true contribution of particular growth groups of firms to studied macroeconomic aggregates. The paper provides both theoretical and empirical information for managers for designing different types of firm growth and enables policy makers to adopt adequate industrial policy measures

Katja Pavlič Škerjanc septuagenaria

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