Uticaj ekonomskog sektora na finansijske performanse kompanija: dokazi iz Bosne i Hercegovine
The impact of economic sector on financial performances of companies: evidence from Bosnia and Herzegovina

Summary/Abstract: This paper investigates the impact of the type of economic sector (financial and non-financial) on the financial performance of business entities. More precisely, we estimate whether companies from the financial sector have better financial performance expressed by Return on Equity compared to non-financial sector companies. Our study further examines the strength of the relationship between financial performances expressed by return on ROE and net profit and several indicators representing profitability, ownership and financial position and economic sector affiliation of companies. The research results show that financial sector companies have better financial performance compared to the non-financial sector, considering the macroeconomic environment in Bosnia and Herzegovina. Furthermore, our empirical results show that the financial sector has a higher level of profitability compared to the non-financial sector. These conclusions are consistent with our expectations due to the characteristics of emerging markets, reflected in the small and underdeveloped market, immense foreign dependence and the economy dominated by financial institutions and the state sector at the expense of the real sector.

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