Hypothetical extraction approach for measuring total economic effects of Croatian ICT sector

The aim of this paper is to estimate total effects of the ICT sector to the growth and development of the Croatian economy. Direct, indirect and induced effects for the period 2010-2015 are expressed in terms of output, gross value added and employment. Output, gross value added and employment of ICT sector is estimated by using hypothetical extraction method. Empirical results of conducted analyzes show that the share of Croatian ICT sectors’ total effects in terms of output, gross value added and employment during the recession period 2010-2013 was decreasing. In the period of economic recovery 2014-2015, related to the accession process of Republic of Croatia to the European Union, total effects of ICT sector in terms of output, gross value added and employment increased. In 2015 the share of the total effects of the ICT sector in terms of output, gross value added and employment in total Croatian economy amounted to 7.37%, 7.74% and 5.58% respectively