THE INFLUENCE OF OWNERSHIP STRUCTURE ON THE PERFORMANCE IN CROATIAN HOTEL INDUSTRY

Transition from the socialist to market economy required, in one of its stages, a change in ownership structure and privatisation of enterprises. Privatisation developed differently in former socialist countries: in some countries, the process has been completed fully, while in other countries, it has been completed only partially. In addition to differences in the dynamics of privatisation across countries, privatisation evolved differently across sectors within a single national economy. Moreover, the birth of the Croatian state and a shift towards the market economy evolved in specific conditions due to the Croatian War of Independence, which placed an additional burden on the transition process which is difficult as it is. This paper examines the privatisation of hotel industry in Croatia, its dynamics and its results in the light of two facts. Firstly, tourism represents a major driver of economic growth in Croatia, and secondly, the resources available within this sector are very specific. The paper therefore evaluates the justification of privatisation by studying various facets of economic performance among privatised and non-privatised enterprises, e.g. their level of productivity and structure of debt, with special emphasis on the performance of mixed enterprises. The study results indicate a far better performance of private firms in relation to state-owned enterprises. More precisely, better economic performance is noticed in enterprises where state holds minority ownership interest than in enterprises where state holds majority ownership interest.