Analysis of the Capital Budgeting Practices: Serbian Case

  • Lidija Barjaktarovic FEFA - Faculty of Economics, Finance, and Administration, Beograd
  • Katarina Djulic FEFA - Faculty of Economics, Finance, and Administration, Beograd
  • Renata Pindžo Ministry of Trade, Tourism and Telecommunication
  • Ana Vjetrov FEFA - Faculty of Economics, Finance, and Administration, Beograd


This paper addresses two major research questions: which techniques firms in Serbia use for project evaluation, and how the Serbian companies calculate their cost of capital. The authors have created the questionnaire and the sample consisting of 65 companies that responded to the enquiry (out of 392) during the year 2015. The results showed that payback criterion is the most dominant capital budgeting technique used by firms in Serbia. Further, the results revealed that large firms as well as multinational firms are more inclined to use discounted cash flow capital budgeting techniques and other sophisticated techniques. Finally, the authors have concluded that the CAPM is not the dominant method for calculating cost of capital by the companies from the sample analyzing the overall sample. Consequently, skilled human capital, the adequate knowledge and developed procedures may contribute to accepting capital budgeting techniques such as discounted cash flow analysis and other sophisticated techniques by larger portion of the companies in Serbia. Finally, existence of perfect financial market is a necessary precondition for implementing all these contemporary financial concepts and its development has to be posed as one of the priorities in the years to come.

Author Biographies

Lidija Barjaktarovic, FEFA - Faculty of Economics, Finance, and Administration, Beograd

Lidija Barjaktarovic has a PhD in Economic Sciences in the sectors of banking and finance. At the University Singidunum in Belgrade she teaches Banking, Risk Management and Corporate Finances (from 2008). She has been Head of Master study programs of Business Economics and Public Sector Management at the University Singidunum since 2015. She had a banking career in the period from 1998 to 2008. It started in Jugobanka A.D. Belgrade, after which she moved to the Societe General Yugoslav Bank a.d. Belgrade, and then to Raiffeisen Bank a.d. Belgrade in order to be promoted to the Head of the Regional Branch Central Serbia. In 2005 she moves to Erste Bank a.d. Novi Sad to become a Director of Corporate Division. At the end of 2007 the Erste Group appoints her member of the Corporate Board and Corporate Working Group on the level of the Erste Holding Vienna. She published more than 30 papers in relevant journals and conferences, related to the banking and competitiveness of the Serbian banking sector, project finance, risk management and collection management. She took part in more than 20 projects within the bank (on local and group levels), University Singidunum and Serbian Ministry of Science and Technological Development.

Katarina Djulic, FEFA - Faculty of Economics, Finance, and Administration, Beograd

Katarina Djulic is Associate Professor teaching the Corporate finance and Corporate governance courses at Faculty of Economics, Finance and Administration in Belgrade. She is also a Senior Consultant in the KPMG, Belgrade since January 2012, in charge or governance, risk and forensic projects. Ms. Djulic holds a Bachelor of Laws from the University of Belgrade, a Master of Laws (LL.M.) from Northwestern University, a Master in Public Policy from Harvard University, JFK School of Government, and a PhD degree from the University of Belgrade, School of Economics. Before joining the KPMG, Ms. Djulic worked as project manager for the Serbian and Montenegrin Corporate Governance Projects of the International Finance Corporation (IFC), a part of the World Bank, which supports private sector sustainable development. Before the IFC, Ms Djulic worked as a legal adviser to firms in Belgrade and New York and, afterwards, at the Ministry of Finance of the Republic of Serbia, first as an adviser to the Minister and then as an Assistant Minister in charge of the Financial System Division. She also worked for European Bank for Reconstruction and Development in London in the Office of General Council. Ms Djulic was a member of the Board of Directors in DDOR, Novi Sad, a member of the Supervisory Board in Jubanka, Beograd and a Chairwoman of the Supervisory Board in Central Securities Depositary and Clearing House, the Republic of Serbia.

Renata Pindžo, Ministry of Trade, Tourism and Telecommunication

Renata Pindžo, PhD is Assistant Professor of Investment Management and Investment Decision Process at the Faculty of Economy, Finance and Administration (FEFA), Singidunum University, Belgrade. Since august 2014, she has been working as Assistant Minister in the Ministry of Trade, Tourism and Telecommunications, in charge of the tourism sector. For a period of six years before that, she was engaged as the Assistant Minister in the Ministry of Economy and Regional Development and in the Ministry of Finance and Economy. She is a member of the National Council for the Tourism Development of the Republic of Serbia. Ms Pindžo graduated from the Faculty of Economics, The University of Belgrade where she obtained master degree in 2003. In May 2011, she obtained her PhD. Her experience includes more than 13 years in Management Consulting and Financial Advisory Services. She has gained knowledge by providing consulting services to many domestic and international companies, including financial institutions and local municipalities during her engagement in Deloitte. Also, as consultant, she was engaged in World Bank`s projects related to restructuring and improving the competitiveness of Serbian economy. In the Economic Institute, Ms Pindžo worked on the research and market analysis projects. She has cooperated with many international institutions (USAID, EAR, EBRD, DFID and GIZ) on complex projects of the restructuring of the Serbian economy. She is the author of numerous scientific papers.

Ana Vjetrov, FEFA - Faculty of Economics, Finance, and Administration, Beograd

Ana Vjetrov is a PhD researcher at the Singidunum University, Belgrade and she has been working as a Teaching Assistant at the Faculty of Economics, Finance and Administration (FEFA) in Belgrade, Serbia, on the Business Banking and Investments Management modules since 2009 and on Corporate Finance since 2014. In addition to teaching and research, she has been involved in the organization of various conferences and was a member of the organizational board. As of recently, she is a member of LSE (London School of Economics) research team within the project Regional Support to Inclusive Education in South East Europe with special focus on VET schools. In addition, she is involved in the Tempus project related to Career Guidance since April 2013. Furthermore, during her studies she interned at Hypo Alpe Adria Bank, KPMG Belgrade (auditing and financial consulting), and Banca Intesa for one year (corporate and retail banking). In 2010, Ms. Vjetrov led the team that won the second place at the International competition organized by CFA (Chartered Financial Analyst) in Budapest on the subject of the Analysis of business performance of the Magyar Telekom. Previous to her doctoral research and teaching post, Ms. Vjetrov earned a Master’s degree with Distinction in Finance and Banking at the Faculty of Economics, Finance and Administration and a Bachelor degree in the English Language and Literature, Faculty of Philology, Belgrade University. She has participated in various international conferences and published several articles.

How to Cite
Barjaktarovic, L., Djulic, K., Pindžo, R., & Vjetrov, A. (2016). Analysis of the Capital Budgeting Practices: Serbian Case. Management:Journal Of Sustainable Business And Management Solutions In Emerging Economies, 21(79), 47-54. Retrieved from