FDI AND ECONOMIC GROWTH IN CROATIA ACCORDING TO ECONOMIC THEORY

The aim of this paper is to analyse influence of foreign direct investments (FDI) on economic growth of Croatia in period between 1995.and 2011. According to economical theory FDI have positive influence on economical growth of the country receiver of investments. The question that this paper is trying to answer is: Is economical theory in case of Croatia confirmed or are the circulation of chosen macroeconomic indicators of economical growth contrary to the expectations. In the paper is analysed the influence of the FDI on employment, GDP, export and investments. The first part of paper describes economical theory and expected consequences of the FDI, the second part of the paper describes movement of the FDI in Croatia, with overview on the structure and short comparison with the transition countries. The third part of the paper is the analysis of FDI relating to each of above mentioned economical indicators of economical growth. The analysis shows that foreign direct investments do not influence on chosen indicators or that FDI do not influence significantly. Based on the given results that are opposite to economical theory the conclusion is that problem is mainly in the structure of FDI with special emphasis on small part of greenfield investments