Doing Business with the State and Firms’ Growth. Grasping Invisible Relational Capital

Serdarević Nino (), Muratović-Dedić Ajla () and Karić Inela ()
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Serdarević Nino: Faculty of Economics, University of Zenica, Bosnia and Herzegovina
Muratović-Dedić Ajla: Faculty of Economics, University of Zenica, Bosnia and Herzegovina
Karić Inela: Faculty of Economics, University of Zenica, Bosnia and Herzegovina

Scientific Annals of Economics and Business, 2016, vol. 63, issue 3, 415-428

Abstract: This study investigates relationships between reported assets growth, human capital effectiveness, ability to do business with state and firms' growth. Longitudinal data were extracted from annual financial reports. Sample includes 80 companies in construction industry of Bosnia and Herzegovina from 2008-2013. Generalized estimating equations (GEE) approach is used for investigation of previously mentioned associations. We found that working with the state in Bosnian construction sector is dominant factor for outstanding increase in net reported income, while the human capital efficiency is negatively associated to its change. These findings support the theory of markets with asymmetric information, suggesting that the relational and social capital of the firm in the imperfect markets, where the state is dominant customer, drives the growth and that precedes firm’s investments into development of intellectual capital.

Keywords: financial reporting; firms' growth; financial performance; intangibles; relational capital; imperfect market (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:aicuec:v:63:y:2016:i:3:p:415-428:n:9

DOI: 10.1515/saeb-2016-0131

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