REGIONAL COOPERATION AND ECONOMIC INTEGRATION

PART IV:
INTRODUCTION
The manufacturing industry is still one of the largest sectors in national economies as
measured by value added and employment. Under the growing pressure of the intensified
global competition it faces a number of challenges. Manufacturing industry in Croatia is
critical to the country’s overall economic development at present and may affect the whole
economy in the coming years. The Croatian manufacturing industry faces a number of
threats and opportunities, which require the understanding of factors and strategies that
drive performance of the companies.
Researchers express a growing interest in the examination of the competitiveness of the
manufacturing industry as a whole and its individual sectors. Past research has identified
various sources of competitive advantage in several industries, but those requirements
seem to differ across different countries and industries. Far less attention has been given to
the process of building competitive advantage in the Croatian manufacturing industry as a
whole, although there are some studies related to the specific sectors in the manufacturing
industry in Croatia (Anic, Rajh and Teodorovic, 2008a; 2008b; Anic et al, 2008a; 2008b).
This paper examines sources of competitive advantage in the Croatian manufacturing
industry. Specifically, the analysis identifies and measures differences in performance
among manufacturing firms, and focuses on the following research questions: RQ1: What
is the relationship between firms’ characteristics and their performance RQ2: How is the
strategic behavior of manufacturing firms related to firms’ performance Performance is
defined as productivity measured as value added per employee. Comparison was made
between high and low performing companies regarding firms’ characteristics and their
strategic behavior. In this study we focus on meso level determinants, including average
company size, company experience, technological intensity, expenses per employee,
average monthly wages, capital intensity, marketing intensity, new product development
efforts, export intensity, average training expenses.
The data for this study was obtained from the company survey carried out during the period
of October 2007 to December 2007 in Croatia. Data was analyzed using cross tabulation
analysis (chi-square test) and one-way analysis of variance (ANOVA).
This study builds on previous work involving competitiveness, manufacturing strategy,
industrial restructuring and performance in the manufacturing industry. It provides valuable
insights into the factors associated with success in the manufacturing industry and the
activities to be undertaken in order to improve the performance of the manufacturing firms.
This study’s findings provide to policy makers and executives guidelines and benchmarks
for developing successful policy measures and business strategies. Managers may
understand what affect their corporate success, while policy makers may receive valuable
input in how they might effectively provide support for underperforming industry in order
to secure jobs and value creation in the long run.
The paper’s structure is as follows. After this introduction, section two briefly gives an
overview of the Croatian manufacturing industry. Section three presents some selected
previous works on analyzed topic. The methodology used in this research is presented
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