Preliminary communication
https://doi.org/10.31784/zvr.10.1.9
THE RELATIONSHIP BETWEEN FOREIGN DIRECT INVESTMENTS, EXPORTS AND ECONOMIC GROWTH
Vlatka Bilas
orcid.org/0000-0002-9021-6651
; Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
Sanja Franc
orcid.org/0000-0001-8787-4429
; Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
Martina Sopta Ćorić
; Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
Abstract
The main goal of this paper is to investigate the relationship between economic growth, foreign direct investment and exports on the example of the Republic of Croatia. Empirical analysis is based on the application of multiple empirical tests, including unit root tests, cointegration tests, and the Granger causality test. The results of most cointegration tests showed that there is no long-run balance relationship between the quarterly growth rate of real gross domestic product (GDP), the share of foreign direct investment series and exports of goods and services in real GDP. The conclusion about the lack of a long-run equilibrium relationship between the real GDP growth rate and the selected mentioned series is robust when time series are used at different frequencies, i.e. quarterly, in relation to annual time series. Based on Granger’s causality test, the impact of the share of foreign direct investment on the real GDP growth rate has not been identified. On the other hand, in the case of the share of exports of goods and services in real GDP, a causal relationship was identified between this share and the real GDP growth rate.
Keywords
cointegration; Granger causality; foreign direct investments; economic growth
Hrčak ID:
277780
URI
Publication date:
20.5.2022.
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