engleski

The effects of public sector investments on economic growth of Croatia

The paper deals with effects of public investments on economic growth of Republic of Croatia. Due to lack of official statistics, necessary datasets were derived by the author for the period 1997-2006. Capital stocks necessary for the estimation are derived by Perpetual Inventory Method (PIM). For the estimation purposes several models of panel regression are used. Reason for that is in obtaining the robustness of the results. Significant, positive and robust results are obtained in case of construction investments effects on growth. High spillover effects are also found which was expected due to small size of Croatian regions. Findings point out that keeping the high public investment level in Croatia together with improvement in institutional surroundings would be beneficial for economic growth.

public investments; economic growth; Perpetual Inventory Method; panel

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