Performance and structure of Croatian financial institutions in the context of institutional change

Co-investigators

Vesna Buterin, PhD
Dario Maradin, PhD
Sabina Hodžić, PhD
Goran Karanović, PhD
Stella Suljić Nikolaj, PhD
Draženka Draženović Kostelac

 

Summary

 

The financial system is the cornerstone of the development of every national economy. The development of an efficient and regulated financial mechanism with a large number of participants is an evolutionary and long-lasting process, which for all post-transition countries and thus for the Republic of Croatia, accelerates the development of the financial system as a developmental necessity. The financial system in the Republic of Croatia is determined by the dominance of banking institutions, with the existence of numerous constraints on allocation of resources and the activity of other institutional investors. Efficiency of the financial industry is increasingly evaluated in numerous scientific papers instead of analyzing traditional measures of financial institutions' performance. Therefore, it seemed justified to explore the structure and performance, as well as the legislative and institutional framework for the operation of the most important financial instuctions in the domestic financial system. This is based on the assumption that institutional framework and institution development should be encouraging for further development and improvement of the financial system, which will ultimately result in an increase in economic growth. The aim of the research is to determine the efficiency of financial institutions in the Croatian financial system by applying the data envelopment analysis. Considering dominance of banking instituions in the domestic financial system, it is expected that the results will show a significant difference in the efficiency of banks and other less developed institutional investors, i.e. pension funds, insurance companies and investment fund. Furthermore, it is expected that project will identify business constraints and suggest measures that can be implemented. This research will be conducted by a team of young researchers gathered from multiple components of the University of Rijeka, but also from the international environment, which will expand the research portfolio of the Faculty of Economics and the University of Rijeka.