IMPACT OF MACROENOMIC VARIABLES ON PRIVATE EQUITY INVESTMENTS IN CROATIA

• Main Authors: Saric, Marija Simic, Maric, Ljubica
• Format: Conference Proceeding
• Language: English
• Subjects: Corruption; Economic conditions; Economic development; Economic growth; Economics; Employment; Finance; Financing; GDP; Gross Domestic Product; Impact analysis; Inflation; Interest rates; Investments; Private equity; Property rights; Statistical analysis; Venture capital
• ISSN: 1849-6903; 1849-6903

Private equity is an alternative source of finance which is provided outside of public markets to start-ups, young companies at an early stage of development and companies with high levels of growth potential. Furthemore, private equity and venture capital funds represent an important link and integration with the real economy and the financial system. They are growing significantly due to investment diversification and yield potential. The positive effects of private equity and venture capital investments on the economy are visible through the impact on innovation, creation of new companies, economic growth, corporate governance, employment etc. Despite the significant growth of private equity investments in the last decade in Europe, there are huge differences in private equity activities in European countries, particularly in countries of Western, Central and Eastern Europe. One of the main reasons for this is the shorter presence of the private equity industry in CEE countries. Many authors have addressed the impact of various factors, economic (GDP, inflation, interest rates, unemployment, market capitalization) and non-economic (corruption, economic freedom, investor protection, property rights index) on private equity investments in the US and Europe. The research about the impact of different economic and non-neconomic factors on private equity investments in Croatia does not exist. Due to this, the aim of this paper is to explore which variables affect the private equity investments in Croatia for the period from 2007 to 2017. The research results show how gross domestic product and corruption have a statistical significant impact on private equity investments in Croatia, while interest rate and inflation do not show statistical significance.