Determinants of Firm-Level Sales Growth in a Transition Economy: Panel Evidence From Serbian Companies

Sales growth represents a fundamental indicator of a company’s business vitality and competitive capability, as it not only reflects success in meeting market demands but also provides essential resources for reinvestment, innovation, market expansion, and long-term business sustainability. It also reflects managers’ ability to use available resources efficiently to expand the firm’s capacity in the future. Effective resource utilization eliminates barriers to business growth and supports the achievement and maintenance of competitive advantage in the market. The purpose of this research is to explore which factors contribute to improving company performance, as indicated by the Sales Growth Rate (SGR). The sample consists of active companies in Serbia, identified based on the Serbian Business Registers Agency (SBRA)’s publication of the most successful firms. Data were collected over a five-year period (2019–2023), resulting in a sample of 375 observations. To address the research objective, statistical techniques, including correlation and panel regression analyses, were employed. The results indicate that firm size, liquidity, Return on Assets (ROA), and leverage have a positive and statistically significant impact on company growth, as measured by the SGR. In addition to these factors, company growth also depends on monetary and fiscal policy measures, incentive policies, and adequate institutional support.