Does international trade cause regional growth differentials in Croatia?
The purpose of this research is to investigate the role of international trade in the process of regional convergence in Croatia. Previous empirical and theoretical studies usually argued that international competitiveness and export orientation promotes regional convergence...
| Main Authors: | , |
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| Format: | Article |
| Language: | deu |
| Published: |
Faculty of Economics University of Rijeka
2015-06-01
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| Series: | Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu |
| Subjects: | |
| Online Access: | https://www.efri.uniri.hr/sites/efri.uniri.hr/files/cr-collections/2/01-mikulic-galic-2015-1.pdf |
| Summary: | The purpose of this research is to investigate the role of international trade in the
process of regional convergence in Croatia. Previous empirical and theoretical
studies usually argued that international competitiveness and export orientation
promotes regional convergence and enables less developed regions to increase
economic growth through enhanced productivity and efficiency. The main hypothesis
tested is that international trade is less significant in explaining regional growth
differentials in Croatia. The method used for the analysis is a panel data model
which is based on conditional convergence hypothesis. The model is oriented to
identification of factors which explain growth differentials of Croatian counties,
including variables related to international competitiveness. The fundamental result
obtained is empirical evidence for conclusion that international trade is not to be
assumed as a key determinant of the regional convergence process in Croatia.
Regional growth in Croatia is primarily determined by quality of human capital,
investments in fixed assets and structural features of individual Croatian counties.
The main conclusion on the basis of the results is that in the past period, regional
growth was primarily determined by domestic demand of households and
government. The highest growth was recorded in counties in which public funds
were invested in infrastructural projects and counties specialised in production of
services for personal consumption. However, the role of international trade in the
regional economic growth can be more pronounced in the future as a result of limited
domestic demand. Improved international competitiveness is a prerequisite for
successful and sustainable regional development. |
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| ISSN: | 1331-8004 1331-8004 |