Intricate nexus of FDI, remittances, emigration, tourism and growth: Navigating economic landscape of Croatia
Intricate nexus of FDI, remittances, emigration, tourism and growth: Navigating economic landscape of Croatia

Summary/Abstract: Research background: In Croatia, a small-open and growing economy that lags behind moredeveloped countries, globalisation has had a considerable impact on economic stability. Theglobalised world economy, characterised by international trade, capital flows and migration,has strongly influenced the economic landscape of Croatia. Although foreign direct invest-ment (FDI) and remittances are fuelling economic growth, emigration poses a major challenge.In addition, the vital tourism sector in Croatia emphasises these relationships and can increaseoverall economic prosperity.Purpose of the article: The main purpose of this study is to analyse the causal relationshipsbetween FDI, remittances, emigration and economic growth in Croatia. In addition, it exam-ines the causal relation between FDI, remittances and tourism growth. Moreover, this studyexamines the relationships between emigration and FDI, as well as emigration and remittanc-es. Methodology: This study adopted a methodological approach that includes time series analy-sis and panel data analysis to consider the complexity of this issue in more detail. Specifically,the study applied a two-pronged approach such as time series analysis to investigate thecausal relationships between FDI and emigration, FDI and tourism growth, remittances andemigration as well as remittances and tourism growth. In parallel, panel data analysis devoteditself to analysing the subtle inter-relationships between FDI, remittances, emigration andtheir combined effects on economic growth using the same methodological approach.Findings & value added: Key findings show several causal relationships in the Croatiancontext: emigration substantially affects FDI, remittances influence emigration patterns,a bidirectional causal relationship exists between FDI and tourism growth and tourismgrowth boosts remittance flows. FDI boosts economic growth in Croatia, which, in turn, caus-es the flow of remittances and patterns of emigration. The importance of this study lies inhighlighting the potential significance of FDI and remittances, as well as the crucial role oftourism in Croatia while emphasising the potential threat posed by emigration to the Croatianeconomy. These findings provide a crucial framework for policymakers to design targetedstrategies that navigate these inter-connected factors, ensuring sustainable economic growthin similar small, growing economies worldwide.

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