Fine....I'll do it myself: lessons from self-employment grants in a long recession period

This paper evaluates the effect of a self-employment grant scheme for unemployed individuals-designed to ease the first 12 months of business operation-on firm growth, survival, and labor market reintegration in Croatia in the 2010-2017 period. Grants offered a moderate amount of finances (up to 50% of average annual gross salary) and absorbed only 5% of funds allocated to active labor market policies (ALMPs), but accounted for 10% of new firms opened throughout the years. We contribute to the literature on self-employment grants with several novel findings. Exploiting the longitudinal structure of the unemployment episodes dataset, we find that individuals who finish their spell with a grant have a significantly lower probability of returning to unemployment. The policy is particularly effective for individuals who would have otherwise had labor market opportunities (men, more educated, prime-age workers, previously employed), individuals who became unemployed after inactivity and lost their job due to a firm's closure-which demonstrates that self-employment subsidies can be effective in ameliorating unemployment. However, the policy was not effective for longer unemployed individuals. At the firm level, we find descriptive evidence that limited liability firms opened via a grant have lower growth potential and worse survival profile, while unlimited liability firms-even though a sizable portion of them closes after a required 12-month grant period-have a more favorable survival profile. Finally, we also find that the effectiveness of these grants has increased throughout the years, indicating toward the direction of institutional learning

OMEGA SCORE MODEL FOR PREDICTING FIRM DEFAULT: APPLICATION IN THE REPUBLIC OF CROATIA

Kada poduzeće ne može podmiriti dugove, vjerovnici imaju mogućnost blokirati to poduzeće. Postupak blokiranja poduzeća vodi se ispred Financijske Agencije. Ovim člankom po prvi puta se primjenjuje Omega Score model (Altman i sur., 2022) na populaciji poduzeća u Republici Hrvatskoj. U članku se koriste podatci o godišnjim financijskim izvještajima, blokadama poduzeća, ugovorima o radu poduzeća te sudski registar. Omega Score model omogućuje podjelu poduzeća u tri grupe: 1) niski rizik (Alpha), 2) srednji rizik (Beta) i 3) visoki rizik (Gamma) od značajne financijske poteškoće. Rezultati ovog članka prikazuju pet pronalaska, od čega četiri u kontekstu ekspanzije te jedan tijekom pandemije. Prvo, gotovo 90% poduzeća u ekonomiji su poduzeća niskog rizika od značajnih financijskih poteškoća. Drugo, velika većina poduzeća koja imaju srednji ili visoki rizik od značajnih financijskih poteškoća su mikro poduzeća. Treće, viši udio rizičnijih poduzeća je u razvijenijim županijama, a manji je udio u manje razvijenim županijama. Četvrto, otprilike 70% poduzeća s visokim rizikom od značajnih financijskih poteškoća koncentrirano je u pet sektora. Peto, iako Omega Score predviđa značajnu financijsku poteškoću, a ne nužno stečaj, analiza ukazuje da više od 50% poduzeća visokog rizika u 2019. godini pokreće stečajni postupak do listopada 2022. godine. Člankom se prikazuju mogućnosti korištenja Omega Score kao alata za sustavno praćenje financijskih poteškoća poduzeća u ekonomiji.When a firm is unable to pay its debts, creditors have the option of foreclosing the firm. The procedure for blocking a firm is conducted in front of the Financial Agency. For the first time, this article applies the Omega Score model (Altman et al., 2022) to the population of firms in the Republic of Croatia. Data on annual financial statements, firm blockades, firm employment contracts and the court register are used. Using the Omega Score model, firms can be divided into three groups: 1) low risk (Alpha), 2) medium risk (Beta) and 3) high risk (Gamma) of default. The results of this article show five findings, of which four in the context of expansion and one during the pandemic. First, almost 90% of the firms in the economy are firms with a low risk of default. Second, the vast majority of firms that have a medium or high risk of default are micro firms. Thirdly, a higher share of risky firms is in developed counties, and a smaller share in less developed counties. Third, approximately 70% of firms at high risk of default are concentrated in five sectors. Fifth, although the Omega Score predicts default and not necessarily bankruptcy, the analysis indicates that more than 50% of high-risk firms in 2019 initiate bankruptcy proceedings by October 2022. The article presents the possibilities of using Omega Score as a tool for systematic monitoring of firm defaults in the economy

EMPIRIJSKE ANALIZE RASTA PODUZEĆA S MIKROPODATCIMA NA RAZINI PROIZVODA: MOGUĆNOSTI I PREPREKE

S porastom snage računala, dostupnošću mikropodataka na razini poduzeća te razvojem novih statističkih programa raste i broj empirijskih analiza na razini poduzeća. Uz analize koje koriste podatke na razini poduzeća, poput bilance i računa dobiti i gubitka, novije se analize koriste bazama podataka na još detaljnijoj razini – razini proizvoda poduzeća. Ciljevi ovoga članka su: a) objasniti klasifikacije navedenih mikropodataka na razini proizvoda, b) ponuditi pregled ekonomskih teorijskih modela na kojima se temelje postojeća istraživanja; c) ponuditi pregled novijih istraživanja koje provode ekonomske analizu s mikropodatcima na razini proizvoda. Članak završava mogućnostima i preprekama za daljnja istraživanja

EVIDENCE-BASED POLICY

Bolje javne politike (JP) mogu voditi većem životnom standardu i povjerenju u javne institucije. Svrha ovog članka je pružiti konceptualni okvir ideje donošenja JP temeljem dokaza kao polazišta pri odlučivanju o JP. Temeljni problem odlučivanja donositelja JP je neizvjesnost o budućem učinku JP, a neizvjesnost je teorijski moguće analizirati tzv. von Neumann-Morgenstern teorijom korisnosti. U primjeni teorije korisnosti, donošenje JP temeljem dokaza ima potencijal pospješiti odlučivanje. Člankom je opisana hijerarhija dokaza (razina 1, 2 i 3) o učinkovitosti JP te su pruženi primjeri više evaluacija JP – dokaza razine 1 u Republici Hrvatskoj. Nadalje, provedeno je anketno ispitivanje stručnjaka za javne financije o evaluaciji JP u Republici Hrvatskoj i pružena su dva pronalaska, prvo, praksa evaluacija JP je sporadična, i drugo, u 2021. godini na preddiplomskoj, diplomskoj ili doktorskoj razini osam javnih sveučilišta, ekonomiste i politologe se ne poučava kolegij vezan uz mikroekonometrijske evaluacije JP (dokaz razina 1). Iskoraci u praksi evaluacije JP mogu voditi povećanju životnog standarda i povećanju povjerenja u javne institucije, međutim, da bi se to ostvarilo, prije svega treba postojati veća potražnja za evaluacijama, a zatim je potrebno i obrazovati stručnjake koji mogu proizvesti evaluacije JP prema međunarodnim standardima.Better public policies can lead to a higher standard of living and trust in public institutions. The purpose of this article is to provide a conceptual framework for the idea of evidence-based policymaking. The fundamental problem of decision-making by policy officials is uncertainty about the future effect of public policy, and it is possible to analyze uncertainty with the so-called von Neumann-Morgenstern utility theory. In the application of utility theory, evidence-based policymaking has the potential to facilitate decision-making. The article describes the hierarchy of evidence (levels 1, 2 and 3) on the effectiveness of public policies and provides examples of policy evaluations – evidence level 1 in the Republic of Croatia. Furthermore, a survey of public finance experts on the topic of public policy evaluation is conducted in the Republic of Croatia. Two findings emerge, first, the practice of public policy evaluation is sporadic, and second, at the undergraduate, graduate or doctoral level of the eight public universities in Croatia, economists and political scientists are not taught microeconometric public policy evaluation (evidence level 1). Stronger emphasis on the practice of public policy evaluation has potential to lead to increased standard of living and trust in public institutions, however, in order to achieve this, stronger demand for evaluations is required, and then current and future experts should be trained on how to conduct public policy evaluations according to international standards

Public procurement and supplier job creation: Insights from auctions

Public procurement contracts (PPCs) of goods, services and works is about one tenth of global gross domestic product. Much research has been conducted on government spending and its aggregate effects, but evidence is scarce at the micro-level. This study exploits sealed-bid PPC auctions of construction works, discontinuity in bidders' win margin and firms' daily employment variation to provide a causal estimate of winning a PPC on firms' employment. Winning a PPC has a small positive impact on a firm's short-run employment. The study investigates mechanisms and heterogeneity that can explain the initial small magnitudes. No compelling evidence is found in favour of political connections, an information leakage channel or PPC size as explanations for the small magnitude. A investigation of longer period shows the impact phases out in less than a year. The lack of a long-term impact is due to runners-up winning more PPCs and runners-up substituting towards more market revenue in the year after closely losing a PPC. Finally, the impacts are concentrated in construction firms that conduct the majority of contracted work in-house. The final estimation shows the effect is about four new employees per PPC with a public cost per job created at €45,200 [€34,200 - €66,200]

Entrepreneurial Ecosystems and Regional Persistence of High Growth Firms: A 'Broken Clock' Critique

The Entrepreneurial Ecosystems (EE) approach makes specific predictions regarding how EE inputs are converted into high-growth firms (HGFs) as an output. A simulation model draws out our hypothesis of regional persistence in HGF shares. Based on intuitions that EEs are persistent, we investigate whether regional HGF shares are persistent, using census data for 2 European countries taken separately (Croatia for 2004-2019, and Slovenia for 2008-2014). Overall, there is no clear persistence in regional HGF shares - regions with large HGF shares in one period are not necessarily likely to have large HGF shares in the following period. This is a puzzle for EE theory. In fact, there seems to be more persistence in industry-level HGF shares than for regional HGF shares. We formulate a ‘broken clock’ critique - just as a broken clock is correct twice a day, EE recommendations may sometimes be correct, but are fundamentally flawed as long as time-changing outcomes (HGF shares) are predicted using time-invariant variables (such as local universities, institutions and infrastructure)

Dizajn razmišljanje kao suvremeni pristup rješavanju poslovnih problema

Istraživanja naglašavaju potrebu za usavršavanjem poduzetnika kako bi čim bolje razumjeli kupce te odgovorili na njihove potrebe. U literaturi i praksi najboljim se pristupom za rješavanje navedenog problema te poticanja inovacija smatra dizajn razmišljanje. Međutim, postoji značajno nerazumijevanje koncepta, kako teoretski, tako i praktično, zbog čega ovaj članak daje povijesni pregled razvoja koncepta dizajn razmišljanja s posebnim naglaskom na njegovu upotrebu u poslovnoj praksi, te pruža pregled ključnih dizajn principa, dizajn procesa i učestalo korištenih dizajn alata. Članak, također, predlaže dizajn razmišljanje kao metodu za rješavanje zakučastih problema te ukazuje na važnost dizajn razmišljanja kao nužne vještine suvremenih poduzetnika i menadžera. Konačno, članak promatra dizajn razmišljanje trima značajnim perspektivama: kognitivnom, organizacijskom te strateškom, s ciljem jasnijeg razumijevanja uloge dizajnera u procesu dizajn razmišljanja, kompozicije dizajn tima, redefiniranja poslovne strategije i cjelokupnog poslovnog modela poduzeća