ENGLISH

IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) ON DOMESTIC INVESTMENT IN REPUBLIC OF CROATIA

Book information

Publisher
Review of Innovation and Competitiveness
Year
2015
ISSN
1849-8795
Language
english
Format
PDF
Filesize
891 kB (912565 bytes)
Series
2015 (1) 1
Volume
1
Pages
24\24
Time added
2016-03-30 08:15:03

Description

The aim of this paper is to investigate how foreign direct investment (FDI) affects domestic investment in the Republic of Croatia. More precisely, the general purpose of this study is to determine the impact of net inflow of foreign capital on domestic investment in order to gain a clearer picture about the sensitivity and efficiency of domestic investment. After parsing domestic investment and FDI in Croatia, according to Croatian Bureau of Statistics and the Croatian National Bank, a historical overview of their movement from 1995 to 2014 was analyzed. In the following an overview and comparison of studies from around the world which deal with similar topic was made. In the empirical part; domestic gross fixed capital formation, changes in domestic stocks, net FDI and GDP growth rate was used as variables. Quarterly time series data ranging from the Q1 2001 to Q4 2014 were processed with the subset VAR (vector autoregressive) econometric model. The results shows that FDI have negative influence on domestic investment in the Republic of Croatia with time lag.

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