Growth In Croatia Research Articles

Effects of Biochar and Cattle Manure under Different Tillage Management on Soil Properties and Crop Growth in Croatia

The negative environmental impact of conventional agriculture threatens agroecosystem stability and food security. Therefore, searching for optimal soil management practices is crucial for maintaining and improving soil functions. This work aims to determine the impact of conventional and conservation tillage on Stagnosols in a semi-humid environment in Marija Magdalena (Croatia) during 2021 and 2022. Under each tillage treatment, subplots were biochar, cattle manure, and control (split-plot design). The conservation tillage exhibits lower compaction in addition to conventional tillage. In 2021, at 0–15 cm and 15–30 cm depths, control plots had the highest bulk density (BD), while biochar plots had the lowest. In 2022, biochar and manure treatments under conventional tillage had significantly higher BD than those under conservation tillage. Penetration resistance did not exceed 2 MPa in all treatments. Soil water content was high in conservation treatments at 0–15 cm. Water-stable aggregates were higher in biochar and manure plots under both tillage treatments. Maize yield was higher in conservation treatments in 2021 and in conventional during 2022. Manure and biochar in the conventional system showed a better impact on grain yields than under conservation. Conservation tillage in rain-fed farming maintains crop yields and reduces soil compaction.

International trade and economic growth in Croatia

This article argues that Croatia’s growth over the past two decades is deeply related to the dynamics of international trade. Under the premise that what is bought and sold in global markets reflects the economy’s fundamentals, we show that the rate of growth compatible with equilibrium in the balance-of-payments, i.e. the dynamic Harrod trade multiplier, is a good predictor of the country’s actual long-run growth rate. For this purpose, we apply a state–space model and the Kalman smoother to obtain time-varying parameter estimates of the exports and imports functions. We use these estimates to investigate the determinants of international non-price competitiveness. Bayesian Model Averaging (BMA) and Weighted Average Least Squares (WALS) techniques are combined to tackle model selection uncertainty. It is shown that R&D investments and human capital accumulation are the most important explanatory variables. The success of the European Union’s (EU) integration process depends on the capacity of its new members to achieve a balanced-growth path. Being the last country to join the union, the experience of this single country is particularly relevant to understand possible development alternatives for the region. We conclude by highlighting the policy relevance of our findings to the evaluation of Croatia’s catching-up performance as part of the EU.

Asymmetric and nonlinear oil price pass-through to economic growth in Croatia: Do oil-related policy shocks matter?

Recent turbulent developments in the world oil market have increased the volatility of oil prices and rekindled interest in studying their impact on macroeconomic activity. Using the vector autoregression framework, this paper investigates the impact of oil price shocks, expressed in linear, asymmetric and nonlinear form, on real gross domestic product (GDP) growth in an oil-importing small open economy, i.e., Croatia, for the period 1995:Q1-2019:Q4. The results corroborate the presence of the asymmetric, nonlinear and direct short-run effect of oil price shocks on real GDP growth. A decrease in oil prices leads to a statistically significant increase in real GDP and its more volatile behavior, while an increase in oil prices causes a considerable drop in economic activity only in the fourth quarter. The oil-related policy shock variables, fuel market liberalization and fuel taxation, turned out to be insignificant predictors of GDP growth in an asymmetric and nonlinear model specification.

Effects of the concentration of manufacturing industry on Croatian regional growth

Spatial concentration of economic activity is a phenomenon that has important implications for the development potential of the local, regional and national economy. This statement stems from two facts: first, there is a tendency of people and economic activity to concentrate in major cities and regions; and second, similar and connected companies sometimes agglomerate together at a particular location to take advantages of the external economies. This paper examines the effects of spatial concentration of manufacturing industry on Croatian regional growth. The industrial concentration (especially of the manufacturing sector) improves competitiveness among firms, enhances knowledge spillovers and increases the demand for labor and industrial products, leading ultimately to potentially higher growth rates. To examine the effects of concentration of manufacturing industry on Croatian regional growth, a panel analysis is conducted combining spatial (21 Croatian counties) and time (16 time periods) dimensions. The best way to measure concentration is by using the location formula to calculate location quotients weather on the basis of employment or gross value added. Therefore, the location quotients are independent variables of interest in the model whereas GDP, GDP p.c. and Gross value added of manufacturing put, regional economic prosperity and industrial output, respectively. Based on the results of the panel analysis it can be concluded that manufacturing industry is still an important factor of regional growth in Croatia, although its relative significance in Croatian economy is continuously declining over the last two decades.

Public-Private Partnership and Circular Economy—What Croatian Students Learn at University

The global economy has been hit by crises in recent decades and the COVID-19 pandemic has contributed to great uncertainty in the possibility of a lasting recovery and an energy transition that will enable sustainable green growth. Budgetary constraints impede the regular delivery of public services, especially in developing countries. Energy efficiency and sustainable economic growth in Croatia can be improved with public-partnership models providing public services. However, this concept is often considered as not appropriate due to many misconceptions in public opinion. We analysed a survey of almost 1500 Croatian students with the aim of verifying the importance of formal education in the recognition of realistic aspects of PPP among the population, which represents important social capital. In comparison to other students, students who have been taught about public-private partnership models at university are more likely to recognise certain misconceptions about public-private partnerships and are more likely to think that it is possible to successfully implement such projects in Croatia. Compared with others, students in the field of energy have shown a greater tendency to apply models of public-private partnership in the energy sector, even though these concern the exploitation of natural resources where there is a traditional tendency to protect the autonomy of public governance. Compared to their male colleagues, female students are more prone to misconceptions about PPPs and are less supportive of private management of public infrastructure.

The Effect of Renewable Energy Consumption on Economic Growth in Croatia

Abstract This paper investigates the effect of renewable energy on economic growth in Croatia for the period 1996-2018. The Autoregressive Distributed Lag (ARDL) technique is used to find the long run relationships between renewable energy, energy consumption and economic growth. The empirical analysis indicates that renewable energy has a positive and significant effect on economic growth in the short and long run. These findings indicate that the Croatian government can continue to boost renewable energy investment without impeding economic growth.

Troubles with the Chf Loans in Croatia: The Story of a Case Still Waiting to Be Closed

In numerous Central and Eastern European (CEE) countries, the global financial crisis as well as the unpegging of the foreign exchange rate of the Swiss franc (CHF) against the euro amplified the repayment troubles of households with the outstanding CHF-linked debt. In Croatia, the CHF loans were approved mainly as mortgages to unprotected and subprime household borrowers without sufficient credit capacity for long-term euro-linked loans, which also contained a possibility of an incremental interest rate change, i.e., the so-called administrative interest rate. This article aims to disclose the reasons behind the credit boom of these loans, the unsustainable CHF debt hardship that the household sector consequently faced, and how it was/could have been resolved, with the Croatian banking sector at the center of the research. Although the CHF case of Croatia has some specificities concerning the prudential regulation and government-sponsored loan conversion, the findings about the supply and demand determinants of the CHF credit boom, as well as a critical assessment of the Croatian government and central bank interventions, might be useful for timely noticing universal threats from the exotic currency-linked loans for the systemic risk and financial stability, and for minimizing the negative externalities from probable debt relief measures. Based on the descriptive and univariate statistics conducted on Bloomberg and the Croatian National Bank (CNB) data, it was found that interest rate differentials and carry trading behavior were the main reasons for the rapid CHF credit growth in Croatia. Nevertheless, according to the financial experts’ opinions obtained via a questionnaire survey, and the court verdicts reached since, the financial consumer protection when contracting these loans was severely violated, which implies that the central bank must enhance its consumer protection role. By adopting a single-country and holistic approach, this is the first paper that deals with the socioeconomic dynamic of the CHF credit default issues in Croatia, which might be interesting as a case study or for making comparison with other CEE countries that have been coping with negative consequences of Swiss francization.

Utjecaj plaća na tržište rada u Republici Hrvatskoj

Tržište rada, vrijednost plaća i životni standard neraskidivo su povezane odrednice gospodarskog razvoja. Hrvatski BDP, životni standard i kupovna moć stanovništva među najnižima su u Europi. Rast plaća u Republici Hrvatskoj postoji, ali, kao i u većini zemalja srednje i istočne Europe, nije popraćen porastom produktivnosti radne snage. Glavnina dohotka hrvatskoga stanovništva otpada na prehranu, što se povezuje sa slabom produktivnošću gospodarstva. U strukturi dohotka stanovništva primjećuje se i znatna ovisnost o socijalnim transferima koji, za znatan udio stanovništva, predstavljaju razliku između siromaštva i relativno normalnog života. Republika Hrvatska je podbacila u kreiranju ekonomskih modela koji omogućuju gospodarski rast kroz tehnološki napredak i jačanje produktivnosti radne snage. Kako bi se poboljšao životni standard u Republici Hrvatskoj, nužno je riješiti strukturne probleme prisutne na tržištu rada i kreirati ekonomske politike koje potiču gospodarski rast. U ovome radu analizira se veza između vrijednosti plaća, tržišta rada i životnog standarda u Republici Hrvatskoj. Postavljena hipoteza glasi: strukturni problemi na hrvatskom tržištu rada utječu na vrijednost plaća, a posljedično i na životni standard hrvatskih građana. Cilj rada jest analizirati strukturne probleme na tržištu rada u Republici Hrvatskoj i njihov utjecaj na vrijednost plaća. Svrha rada je ukazati na važnost efikasnog tržišta rada u nacionalnom gospodarstvu Republike Hrvatske.

Higher Education Funding and Economic Growth: Empirical Evidence from Croatia

Deprived of investment in education, no country can expect sustainable economic growth and development. Higher education is particularly a priceless tool in today's era of globalization that requires continuous education to keep up with new knowledge. According to UNESCO (2014), higher education is no longer a luxury; it is essential to national, social and economic development. The impact of education on economic growth is possible to observe within the so-called ‘education led growth hypothesis’. The main aim of this paper it to analyse the higher education size and structure, model and financing sources in Croatia and to test the ‘education led growth hypothesis’ on the example of Croatia. The study will apply the Granger causality test to evaluate if there is any causal relationship between investment in higher education and economic growth in Croatia.

MEASURING CREDIT STRUCTURE IMPACT ON ECONOMIC GROWTH IN CROATIA USING (VECM) 1990-2018

Studies on the finance-growth link use different proxy variables for financial development. Among the most used is the total credit share in the GDP. Previous empirical studies show to be sensitive to the choice of the finance proxy indicator. Total credit share in the GDP appears biased in empirical modeling. Credit structure (loans to firms and households) prove to be more robust when used in the modeling. Credit structure reveals a different impact on economic growth showing lending policy impact varies depending on the credit structure. Researchers studying the finance-growth link must account for this when investigating supply leading and demand-following theories. Policymakers should also take care of the credit structure since loans to household discourage growth in the long run and are sensitive to economic shocks. We find empirical evidence to support both supply leading and demand- following theory. Bi-directional causality between private loans to firms/households and economic growth exists using Granger causality test. Private loans to firms and households economic growth exists using Granger causality test. Private loans to firms and households have a positive impact on economic growth in Croatia.

Sources of export growth and development of manufacturing industry: empirical evidence from Croatia

The article quantifies the sources of manufacturing export growth in Croatia. The research objectives are achieved by applying the constant market share method (C.M.S.) and input–output model. While the C.M.S. method quantifies the factors which explain trends in manufacturing exports, the input–output method quantifies the impacts of manufacturing exports on other domestic sectors. The obtained results show that after the E.U. accession export performance of the Croatian manufacturing industry have substantially improved. The results indicate that a gain in competitiveness in the Croatian manufacturing industry was the most important factor which determined the increasing share of national companies in a period from 2013 to 2015. Besides the manufacturing industry, export growth indirectly contributes to better performance of all domestic producers included in the value added chain of exporters. Indirect effects are the most pronounced for agriculture, trade, transport and business services.

Kretanje osobne potrošnje na primjeru odabranih članica EU-a

Personal consumption is the largest macroeconomic aggregate with a large impact on economic trends and a share of GDP of about 60%. The aim of this paper was to determine whether there are significant differences in the movement and structure of personal consumption in Croatia and the two new EU members - the Czech Republic and Romania and to establish patterns of changes in personal consumption in the named countries. The analysis confirmed a strong correlation between personal consumption and GDP, and this correlation is stronger in Romania, where the direction of these two rates of change almost coincides. The previous confirms personal consumption as an important category to be taken into account when adopting macroeconomic policies. The analysis, also, showed that the share of personal consumption in GDP is the smallest in the Czech Republic, suggesting that there are some other Czech economy drivers, primarily investment and net exports. Given that the Czech Republic and Croatia are small and open economies comparable to the level of development, and considering that the Czech economy growth is considerably higher than in Croatia, it can be concluded that the model of economic growth in the Czech Republic is better and more sustainable in the long run. The model of economic growth relying on personal consumption as a generator of aggregate demand is not a model that can ensure sustainable GDP growth in Croatia, especially in terms of population decrease. It is, therefore, necessary to provide a stimulating institutional framework for the growth of domestic and foreign investments and greater export orientation.

Corruption and economic growth in Croatia

Today, more and more authors are involved in researching the economic phenomenon of corruption and its impact on many macroeconomic indicators. Nevertheless, transitional surroundings have offered a unique opportunity in history to explore the relationship between corruption and economic growth in entirely different environment from the one in developed western economies. Researching of, at first sight, two unrelated social phenomena gave additional light on the causes of economic growth in Croatia. The researching paper also gives Croatian position among ten transition EU member countries. The corruption perception index was used as the best measuring method of corruption in Croatia and other countries while economic growth was measured by GDP per capita instead of growth rates. We explained reasons why we did so. The time period covered by the research was from 1999 to 2009 for Croatia and from 1995 to 2009 for ten transition EU member countries. Total of 137 cases were evaluated. The researching paper demonstrates the negative impact of corruption on economic growth where the strength of its influence is relatively obvious. It is also evident that the impact of corruption on economic growth is substantially a direct one and that it takes place without a significant time delay. Results for the period of research related to Croatia, more closely fit the observed data of other transition countries. Corruption could be an additional explanation (certainly not the only one) for low or high level of GDP per capita in Croatia. Misunderstanding of all the factors that encourage the economic growth may lead to macroeconomic structural misbalances in Croatian economy.

TECHNOLOGICAL PROGRESS IN CROATIAN PERENNIAL AGRICULTURE

The agricultural sector in Croatia has declined or stagnated since the 1980s. Despite the high subsidies and EU accession, it failed to improve its production level, but the underlying causes of the subsidy inefficiency remain unclear. Trade liberalization and bear prices of agricultural products in the EU are some of the frequently cited arguments. On the other hand, government interventions in the form of direct subsidies have always been significant. Following the prevailing theoretical body of literature, we assumed that these interventions were at least in part aimed at achieving sustainable competitive position of the agriculture sector vis-a-vis foreign markets. Therefore, this paper analyzes Croatian perennial agriculture in detail with the aim to reveal whether subsidies in this sector led to technological progress and productivity increase. A panel data set for all Croatian legal entities doing business in the field of perennial agriculture in the 2008-2014 period was used to construct a production function in order to extract the total factor productivity and determine whether the K/L ratio is properly set. It is shown that the K/L ratio is entirely inadequate, while also indicating the decreasing returns to scale which should have been overcome with technological progress (TFP). The TFP in perennial agriculture remained constant throughout the period despite the changes in subsidies. Moreover, the majority of perennial subsectors have displayed significant decrease in the TFP. Finally, a TFP model was built to determine the factors that affect the TFP growth. By employing a set of 301 variables which describe the companies? internal and external properties, only two remained significant: export and subsidies, but with almost inexistent effect, revealing that exports and current subsidy distribution cannot be a drive for perennial or for non-perennial agriculture growth in Croatia.

Modelling the CO2 emissions and economic growth in Croatia: Is there any environmental Kuznets curve?

This paper investigates the existence of environmental Kuznets curve in Croatia for the period of 1992Q1-2011Q1. To fulfil to goals of the paper, Autoregressive Distributed Lag (ARDL) and VECM method has been applied. Results show the existence of inverted U-shape relation between CO2 emissions and economic growth in long run that is the validity of EKC. Granger causality based on VECM approach shows bi-directional causality between CO2 emissions and economic growth in short run and uni-directional causality from economic growth to CO2 emissions in long run. DOLS and FMOLS results confirm the robustness of long run results. Variance decomposition and Impulse response also show similar results. Beauty of the paper is the consistency of results from different techniques.

What is the Effect of Credit Standards and Credit Demand on Loan Growth? Evidence from the Croatian Bank Lending Survey

This paper explores the results from the Bank Lending Survey and bank-level data on loan quantities and prices to determine the effects of lending standards and loan demand on credit growth in Croatia for the period from the third quarter of 2012 to the last quarter of 2015. Panel analysis has shown that there are statistically significant effects of credit standards and demand on the growth of certain types of loans. The results of the counterfactual analysis indicate that credit demand affected loan growth more than credit standards, especially for loans to enterprises.

Internal Migration, Regional Economic Convergence, and Growth in Croatia

The article aims to explore internal migration flows, test for economic convergence, and assess the effects of internal migration (net and gross) on convergence and growth in terms of a neoclassical model in Croatia in the period 2000 to 2011. Croatia is a country with significant and persistent regional economic disparities, migration, and turbulent economic and political changes. The main findings of panel data analysis with fixed effects show that (i) contrary to the expectations based on neoclassical theory, the Croatian counties have been facing absolute and conditional economic divergence; (ii) in- and out-migration works symmetrically; (iii) net migration mainly appears to be a force that accelerates divergence, just opposite to gross in- and out-migration; (iv) although the estimated parameters of net and gross migration have expected signs, their effect size lies in the range from statistically significant but minor to insignificant; and (v) migrant characteristics and behavior matter when the effect size is considered.

Fiscal Austerity Versus Growth in Croatia

Despite numerous studies and polarized debate, no consensus on the implementation of fiscal austerity has been achieved because this complex subject has not been the subject of a sufficient methodological exploration. Emphasis should be placed on defining the methodology of austerity and gathering statistical data to influence the implementation of social transfer policies. In addition, it is necessary not only to take a hybrid approach to fiscal and monetary policy but also to adopt economic laws and quantitative economic relationships. The benchmarking country used in this paper is Croatia. The outcome of this research can serve as the basis for future decision-making and research.

Government size and efficiency as constraints to economic growth: comparing Croatia with other European countries

The goal of this article is to discover binding constraints to economic growth in Croatia relating to government. Following a growth diagnostics framework, we limit our analysis to government size and efficiency as potential constraints to growth. We calculate the optimal size of government and estimate the efficiency of government spending by applying data envelopment analysis and Tobit regression models. Apart from Croatia, our results also relate to other European Union member states, Iceland and Norway. We find that a binding constraint to Croatia's economic growth is not a big government but rather a weak government plagued by corruption. The average optimal size of government in old EU member states is larger than that in new EU member states but the former need to cut their government expenditure more sharply in order to reach the optimal size. Their government spending on economic growth factors is however more efficient on average than that of the latter countries.

Tourism, Real Effective Exchange Rate and Economic Growth: Empirical Evidence for Croatia

AbstractThe aim of this paper is to examine the long‐run and short‐run relationship between tourism, real effective exchange rate and economic growth in Croatia. The econometric framework used for analysis is the Johansen Maximum Likelihood cointegration technique. For testing the stability of long‐run equilibrium relationship vector error correction model technique has been applied on a quarterly data set covering the period 1996–2013. The main findings of the paper confirm the stability of the long‐run equilibrium relationship between tourist arrivals (ARRIVAL), openness of the economy (OPEN) and real effective exchange rate as independent variable and gross domestic product (GDP) as dependent variable in Croatia. Furthermore, the results indicate short‐run causality between OPEN and GDP, as well as between real effective exchange rate and GDP. Copyright © 2014 John Wiley & Sons, Ltd.