BUSINESS AND DEVELOPMENT FINANCING OF FIRMS IN THE MARKET ECONOMY
Main researcher
: TEODOROVIĆ, IVAN (49313) Assistants
NUŠINOVIĆ, MUSTAFA (33822)
BENDEKOVIĆ, JADRANKO (3141)
LASIĆ, VLADIMIR (151193)
BROZOVIĆ, TOMISLAV (79735)
TOMAS, ANDREA (900787)
Type of research: developmental Duration from: 01/01/91. to 12/31/94. Papers on project (total): 48
Institution name: Ekonomski institut, Zagreb (2) Department/Institute: The Center for the Research of Economics, Organization and Management in the Firm Address: Trg J. F. Kennedy 7, 41000 Zagreb City: 10000 - Zagreb, Croatia
Communication
Phone: 385 (0)41-235-700
Fax: 385 (0)41-210-467
E-mail: mustafa.nusinovic@ekist.eizg.hr
Summary: The market orientation of Croatian economy requires
in its implementation the redefinitioning of the business and develop- ment
behaviour of firms in which the field of financing is sensitive and
important particularlly. The starting analysis of the exsisting system of
business and development financing is the base only for investigation and
determination of the model for business and development financing o firms
in Croatia by using the comparative analysis and tested solutions
prevailing in the developed market economies as the orientation. The
theoretical and methodological key stones and organizational aspects of the
capital market in the developed market economies are to be investigated and
analized. Models of business and development financing of firms in Croatia
are to be worked out especially. In the scope of this model the market
valuation of assets and the cost of capital is to be investigated
particularly. The research is to be resulted with the selection of the
crucial determinants which should facilitate short-term and long-term
financial decisions. The special emphasis is put on the capital budgeting
problems of firms both from theoretical and practical views. In regard with
requirements that the research should comprise as many as possible issues
related to financing, the accounting system of Croatia and data base are to
be investigated and analized. The internationalized and standardized
procedures of financial analysis and planning are to be applied in the re-
search. Results of the research are to be tested in the simula- tion models
and soft-wares for the investment project planning are to be programmed.
Keywords: long-term financing, short-term financing, cost of capital, cash-flow, capital butgeting, working capital, capital structure, risk, financial planning, financial ratios, stock-exchange
Research goals: The development of the market structures was
limited by the socio-political system in the past. However, the market
rules have been breaking the institutional limitations and the qasy-
markets have been appearing as the differences between the normative system
and the behaviour. The fact is that the market of goods has been developed
but the markets of factors, i.e. the labour market and the capital market
remained undeveloped. With the exeption of small firms, the influences of
the market adapta- tion on the behaviour of the most number of firms were
negligi- ble. The socialization of the business and development risk and
the voluntarity of the decision making lead to the structural
discrepancies. The formation and allocation of capital in the capital
market were under political and government full control and the results
were suboptimal allocation and structural dis- crepancies mentioned.
Instead of the indicative - market oriented decision making of the capital
allocation the directive - planned oriented decision making of the capital
allocation was implement- ed. The microeconomic business and edvelopment
decisions were results of the macroeconomic decisions only. The goal
of the research in this project is the determina- tion of reasons
conditions and ways how to build the model related to the financing of
operation and dvelopment of firms in Croatia, which should be consistent
with the market economy based on the majority of private ownership. The
changed function of the firm, i.e. the enlarging value of firm and wealth
of the owners is to be analised. Since securities have been overtaking
larger parts on the formation and allocation sides, related conditions and
ways of changing behaviour of firms are to be investigated. In this project
new forms of short-term and long-term financing of operation and
development of firms are to be investigated particilarlly. The changed
methodological and analytical proce- dures in the financial planning are to
be introduced. In that, the importance of the working out of the
methodology for invest- ment project planning is emphasized. The whole
research is based on the known international standards. The necessary
adaptations may not influence the compatibility related to implementational
solutinos especially.
COOPERATION - INSTITUTIONS
Name of institution
: Hrvatska kreditna banka za obnovu Type of institution: Other City: 10000 - Zagreb, Croatia