engleski

Composition and Determinants of Foreign Direct Investment in Croatia 1993-2002: An Empirical Evaluation

The aim of this paper is to provide an overview of the size, composition and determinants of foreign direct investment inflows into Croatia during the period 1993 to 2002. The sectors with the largest FDI receipts include telecommunications (26, 3% of total foreign direct equity investment within 1993-2002 period), other monetary intermediation (mainly banking, 21, 4% of total), pharmaceuticals (14%) and the cement industry (4, 5%). The 3 leading countries from which FDI inflows has originated during the observed period, which accounts for 66, 1% of total FDI inflows, are Austria (28, 6%), Germany (22, 8%) and the USA (14, 7%). Greenfield investment, especially in export-oriented branches, has been negligible (13, 2% of total FDI inflows in the period 1993-2001). In this paper, special attention is paid to the impact of FDI on exports. The focus of analysis is on FDI firms' export intensity, contribution to country's exports, export growth in the last few years, and the FDI inflows coverage of the current account deficit in Croatia. In this context, the impact of FDI on development in transition is also assessed. Our analysis shows that increase in FDI flows has not generated a significant increase in exports in Croatia and that the effect on employment is very doubtful. The latest section is focused on existing measures to attract foreign direct investment. We also include our reccommendations to economic policy makers.

foreign direct investment (FDI); exports; employment

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