Analysis of Sustainable Growth Rate in Manufacturing and Construction Firms: Evidence from Selected Western Balkan Countries

Abstract

This research’s primary goal is to examine the factors influencing organizations’ sustainable growth rates (SGR) between 2013 and 2022. A panel regression analysis was done to extensively assess the variables linked with SGR. The study included data from 92 manufacturing and construction companies in selected Western Balkan countries, resulting in a dataset of 1,012 observations. According to the study, asset efficiency and sales growth have a positive and significant impact, while leverage negatively impacts the SGR. These results are important to companies because they provide useful insights that can help them achieve their planned SGR. Management can make informed decisions to improve business performance by better understanding the impact of factors such as asset efficiency, leverage ratio, and sales growth on SGR. This informed decision-making not only ensures a healthy growth path but also helps avoid major financial problems. The study underlines that the findings serve as a significant tool for business management in long-term planning and strategy formulation. By providing insight into the company’s growth goals and prospects, this congruence also benefits numerous internal and external stakeholders. Additionally, it makes it possible to examine the company’s overall business situation more precisely and helps forecast its long-term performance.