Financial Efficiency and Employment Resilience in the Croatian Metal Processing Industry: A Firm Size Perspective

Present study investigates the relationship between financial efficiency and employment resilience in the Croatian metal processing industry. The study makes use of firm-level secondary data for the period 2017-2025. Our analysis classified enterprises under NACE C24 (manufacture of basic metals), C25 (manufacture of fabricated metal products) and C28 (manufacture of machinery and equipment) with firms grouped into micro, small, medium and large categories. These categories were based on size of employment. Further, employment resilience was measured through employment change, while financial efficiency was captured using revenue per employee, profit per employee and cost efficiency ratio. Shapiro–Wilk test confirmed that all selected variables deviated from normal distribution. Therefore, size-wise differences in employment change were examined using non-parametric tests, while ANOVA was employed as a robustness check. Our study made use of Spearman correlation to assess the relationship between financial efficiency indicators and employment change. Lastly, ordinary least squares regression was employed to estimate the impact of financial predictors on employment resilience while controlling for firm size effects. The findings indicated statistically significant differences in change in employment across firm sizes, with smaller firms showing relatively higher employment contraction. Correlation and regression results confirmed that higher revenue and profit per employee were positively linked with employment resilience, whereas higher cost intensity negatively influenced employment change.