R. JOVANČEVIĆ: The Impact of Foreign Investments Flows on Croatian Economy - A Comparative Analysis 826 EKONOMSKI PREGLED, 58 (12) 826-850 (2007) Radmila Jovančević* UDK 339.727.22 (497.5) JEL Classifi cation F21, P33 Prethodno priopćenje THE IMPACT OF FOREIGN INVESTMENT FLOWS ON CROATIAN ECONOMY - A COMPARATIVE ANALYSIS The aim of this paper is to analyze and compare foreign investment trends in the countries of the last wave of accession to the European Union. The analysis is made on the basis of foreign direct investment and foreign debt fl ows in those countries for the period 1989-2006. The comparative analyses of both fl ows suggest that there was a wide difference in effi ciency of those fl ows, which is partly explained by the character of foreign direct investment (Greenfi eld versus equity investments). The main conclusion of the paper is that regardless of the volume of infl ows, the national investment policy might have considerable impact on the real growth of the economy. Keywords: foreign direct investment trends, transition, foreign debt, in- vestment policies 1. Introduction The aim of this paper is to analyze the progress in the transition of Croatia comparatively with other transition countries, the recent members of the EU, and the effects of foreign direct investment (FDI) infl ows on the economy. The fi rst section presents the transition process in Croatia. The second section deals with * R. Jovančević, Full Professor, Department for Macroeconomics and Economic Development, Faculty of Economics & Business - Zagreb. (E-mail:
[email protected]) The paper was presented on the 7th Global Conference on Business and Economics, Oct 13-14, 2007 in Rome, Italy, organized by the International Journal of Business and Economics and the Association for Business and Economics Research.