Regional Determinants of Foreign Direct Investments in Croatia

Abstract

The aim of this paper is to identify the factors that infuence the unequal distribution of FDI infows and that foreign investors identify as signifcant in making investment decisions regarding Croatian regions. Panel data analysis was applied: static (random effects) and dynam-ic analysis. The results show that positive and signifcant infuences on FDI have: education, infrastructure, the manufacturing industry, dum-my variables for areas of special state concern and capital city region, while negative statistically signifcant infuences are: unemployment and dummy variable for border regions with the EU. The basic conclusion is that FDI infows follow the development path of the Croatian regions (with the highlighted agglomeration effect) and that efforts in creating preconditions for econom-ic growth will, at the same time, have an impact on attractiveness of a particular region for foreign investments.