Abstract

The use of fundamental corporate finance principles as well as the combination of their effects does not always contribute to the same performance effects and firms’ growth. It can considerably vary in certain periods, market turbulences and various industries. Referring to the permanent need for exploration of the individual and integrated effects of the corporate finance principles on firms’ growth in specific circumstances, on the one hand, and particular importance of wood industry in Bosnia and Herzegovina (B&H), on the other, in this paper we examine the extent to which corporate finance principles support wood industry growth in B&H.

Specifically, the aim of this research is to investigate the contribution of investments, financial leverage and dividend policy to the growth of firms in this particular industry. Furthermore, the compliance of the paper findings with theoretical concepts and expectations of corporate finance principles role arises as the additional research challenge. Finally, we are interested to find out if the empirical results provide a solid base to apply consistent incentives policy that may further stimulate wood industry growth in B&H.

We select all wood-processing firms in B&H from 2008 to 2016. Stata 15 is applied in the empirical analyses and calculations.

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