THE INFLUENCE OF FOREIGN DIRECT INVESTMENT ON THE GROWTH OF GDP, ON EMPLOYMENT AND ON EXPORT IN CROATIA

According to the huge amount of foreign direct investments that Croatia has attracted, the aim of the study is to determine if FDI have an influence on the chosen (problematic) macroeconomic indicators of the Croatian economy. The influence of the received foreign direct investments on the economic growth, export and employment is analysed in the paper. Two parallel VAR models are compiled using different econometric analysis (time series analysis, cointegration analysis and VECM model, prognostic errors' decomposition of variances, impulse responses of the variables). These models identified very stable and significant long-term Cobb-Douglas production function in the area of cointegration. It was determined that FDI inflow does not have effect on the GDP growth and export, while it has negative effect on the employment. It is concluded that expected positive effects failed because the share of greenfield investments is low.