Foreign Direct Investments, Exports, and Economic Growth in Croatia: A Time Series Analysis

This paper studies the relationship between foreign direct investments, exports, and economic growth in Croatia using annual time series data for the period 1994-2012. Several econometric models are applied including the bounds testing (ARDL) approach and the ECM-ARDL model. The results confirm a bidirectional long run and short run causal relationship between exports and growth. These results offer new perspectives and insight for a new policy in Croatia for a sustainable economic growth.