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.JEL Codes - C58; H52; I25; O4

Development Impact of FDI in Hotel: Case Study of Terme Tuhelj in Croatia

The main objective of this study is to assess the development impact of foreign direct investment (FDI) in tourism in the case of foreign-owned hotel on the micro-location of Croatia. As an example of this study, the FDI in the Terme Tuhelj, a hotel complex which is located in the area of small local government in the continental Croatia, is choosen. The research methodology is based on questionnaires, unstructured interviews and processing of secondary data sources. The research results show that Terme Tuhelj became the engine of growth of Tuhelj municipality and Krapina-Zagorje County. The Terme Tuhelj example showed how a foreign-owned hotel, in less developed country, has a significant development impact on the local economy.

Tourism foreign direct investment led tourism gross value added: a co-integration and causality analysis of Croatian tourism

The purpose of this study was to investigate the causal relationship between foreign direct investment in tourism and tourism gross value added in Croatia. The study employed econometric techniques, such as the unit root test, Johansen co-integration, and the Granger causality test, in a vector error correction model (V.E.C. model), and the Toda–Yamamoto causality test in a vector autoregressive model (V.A.R. model), using quarterly time-series data from 2000(1) to 2012(4). The results confirm the existence of a stable co-integrated relationship between variables in the long term. A short-term relationship was also proved between foreign direct investment in tourism and gross value added, using the Toda–Yamamoto causality test. By including control variables, the two-way causality between the subject variables was proven using the Granger causality test

Does Terrorism have a Limited Impact on International Investments in Tourism? Some Theoretical Considerations

Foreign direct investment (FDI) in tourism is a catalyst for a number of positive changes within the economy of the host country and reflect positively on economic growth. Therefore, it is in the interest of many countries to attract foreign investors, which is especially prevalent in developing countries. At the same time, the 21st century is marked by major changes in terms of safety, influencing the appearance of the contemporary international terrorism. Terrorism has many direct and indirect effects and is influenced by mass media, reflects on changes in behaviour patterns of modern tourists, including the movement of tourist flows as well as flows of FDI into tourism. Tourism, FDI and security are three very interrelated concepts. The purpose of this paper is to explore to what extent uncertainty, primarily in the form of terrorism, affects FDI in tourism. It should also be borne in mind that the picture of the risky countries in the conditions of global uncertainty changes very rapidly and in such circumstances each destination may potentially become risky. Existing research on terrorism and foreign direct investment in tourism are scarce and give different results

Causality between FDI in Real Estate and Tourism Growth: County-level Data from Croatia

CC BY-NC-ND 4.0Croatia is a developed tourist destination that is overly dependent on tourism. Looking at the Croatian economy, the first thing that catches one’s eye is the role that tourism plays in its structure. It is a frightening fact that tourism generates almost a quarter of Croatia’s GDP. Tourism in Croatia has been growing steadily for years, and before the COVID-19 pandemic, Croatia began to face the problem of over-tourism. The real estate market in Croatia is also recording continuous rates of price growth, especially with regard to the attractive coastal region. Foreign direct investment (FDI) in real estate in Croatia became significant during the second decade of the 21st century, and today real estate is in second place if one looks at the structure of FDI in Croatia according to the National Qualification of Activities. In the last 10 years, real estate has accounted for 17.8% of all FDI in Croatia. Given the attractiveness of Croatia as a tourist destination, it is not surprising that its real estate market draws attention. The main goal of this paper is to determine the causal link between FDI in real estate and tourism at the level of Croatian counties in the period from 2007 to 2020. The research results found the existence of a one-way causal relationship running from international tourist arrivals to FDI in real estate at the 5% level of significance

MACROECONOMIC ENVIRONMENT AND GREENFIELD FOREIGN DIRECT INVESTMENT OF HOTEL BRANDS

The powerful attraction of foreign direct investment (FDI) is particularly important for further development of tourism. The strategically focused attraction of FDI in tourism has a much higher significance because of the multiple effects in relation to other segments of the economy. In this context, it is necessary to highlight the investment engagement and the presence of globally branded luxury hotels.The purpose of the study is to assess the macroeconomic environment, the effects of greenfield FDI in tourism and, consequently, the presence of global hotel brands using the comparative analysis of the selected countries as the methodological basis of this study. The research results indicate that a favorable macroeconomic environment plays an important role in attracting foreign capital. Countries that have a more favorable macroeconomic environment attract more greenfield FDI, and provide a greater presence of global hotel brands, and thus greater competitiveness. Also, the political stability, the encouraging macroeconomic business conditions, the elimination of administrative and legislative barriers, the elimination of the country\u27s image as a corrupt destination and tourism staff education at all levels are particularly important for FDI in tourism

Učinci turističkih transnacionalnih korporacija na zemlje u razvoju i manje razvijene zemlje

U današnjim globalizacijskim uvjetima kao glavni nositelji, odnosno akteri globalnog poslovanja nameću se transnacionalne korporacije koje su, što se tiče sektora turizma, prepoznatljive u obliku mega hotelskih, agencijskih i sličnih lanaca. Inozemni su hotelski lanci danas određeni standard koji svaka ozbiljnija turistička destinacija mora zadovoljiti ukoliko želi biti konkurentna na globalnom turističkom tržištu. S obzirom na značaj koji se pridaje izravnim inozemnim ulaganjima u turizam i očekivanja hrvatske Vlade od ulaska inozemnog kapitala u turistički sektor, svrha je rada razmotriti ulogu i značaj transnacionalnih korporacija u turizmu. Cilj je rada sintetizirati najvažnije učinke transnacionalnih turističkih korporacija na zemlje u razvoju i manje razvijene zemlje

The Economic Impact of Foreign Direct Investment on Tourism in Croatia

Svrha ovog doktorskog rada bila je istražiti i analizirati ekonomske učinke izravnih inozemnih ulaganja u turizam, predložiti metodologiju vrednovanja ekonomskih učinaka izravnih inozemnih ulaganja u turizam i na primjeru mikrorazine i makrorazine Republike Hrvatske te naposljetku predložiti smjernice za privlačenje adekvatnih izravnih inozemnih ulaganja u turizam Republike Hrvatske. U empirijskom dijelu ovog doktorskog rada procijenjeni su ekonomski učinci izravnih inozemnih ulaganja u turizam na primjeru hotela u inozemnom vlasništvu na mikrolokaciji Republike Hrvatske, a zatim su ti učinci konzistentno povezati s makrorazinom. Ciljem ocjenjivanja ekonomskih učinaka izravnih inozemnih ulaganja u turizam na mikrorazini provedena je studija slučaja 'Terma Tuhelj'. Primjer Terma Tuhelj pokazao je kako jedan hotel u inozemnom vlasništvu, u manje razvijenoj zemlji, ima značajan razvojni učinak na lokalno gospodarstvo. Nasuprot nedostatku inozemnog ulaganja u Terme Tuhelj, čime je došlo do gubitka domaćeg vlasništva, identificirano je mnoštvo pozitivnih učinaka koji su proizašli kao rezultat djelovanja novog vlasnika. Najvažnije od svega je možda naglasiti kako se općina Tuhelj u jeku financijske krize razvijala. Istraživanje učinaka na makrorazini provedeno je u dva dijela. U prvom su dijelu istraživanja ispitani učinci portfelja izravnih inozemnih ulaganja u turizam i ostalih relevantnih kontrolnih varijabli na produktivnosti turističkog sektora putem modela proširene Cobb-Douglasove proizvodne funkcije. U drugom su dijelu istraživanja ispitana kointegracija i uzročnosti portfelja izravnih inozemnih ulaganja i bruto dodane vrijednosti u turizmu, portfelja izravnih inozemnih ulaganja u turizam i broja dolazaka inozemnih turista, te ukupnog portfelja izravnih inozemnih ulaganja u Republiku Hrvatsku i portfelja izravnih inozemnih ulaganja u turistički sektor. U prvom dijelu istraživanja na makrorazini, rezultati provedene regresije pokazali su kako portfelj izravnih inozemnih ulaganja u turizam ima pozitivan signifikantan učinak na produktivnost turističkog sektora. Drugim riječima, portfelj izravnih inozemnih ulaganja u turističkom sektoru utjecao je na rast produktivnosti turističkog sektora u promatranom razdoblju. Drugi dio makroistraživanja dokazao je VECM modelom kako postoji stabilna dugoročna veza između portfelja izravnih inozemnih ulaganja i bruto dodane vrijednosti u turizmu. Toda-Yamamotovim testom uzročnosti dokazana je i kratkoročna veza, odnosno potvrđena je uzročna veza od izravnih inozemnih ulaganja k bruto dodanoj vrijednosti. Također je Grangerovim i Toda-Yamamotovim testom uzročnosti dokazana kratkoročna veza, odnosno potvrđena je uzročna vezu od izravnih inozemnih ulaganja u turizam k ukupnim izravnim inozemnim ulaganjima u Republiku Hrvatsku te uzročna veza od izravnih inozemnih ulaganja u turizam k broju dolazaka inozemnih gostiju. Zaključeno je kako Hrvatska i njene destinacije trebaju, kako bi što skorije postale zanimljive međunarodnom inozemnom kapitalu te si time osigurale nužni razvojni kontinuitet i dodatno unapređenje konkurentske sposobnosti, prije svega, ukloniti ili makar neutralizirati značajna postojeća investicijska ograničenja. Za izravna inozemna ulaganja u turizam od posebnog je značaja politička stabilnosti regije, poticajni makroekonomski uvjeti poslovanja, otklanjanje administrativnih i zakonodavnih barijera, otklanjanje imidža zemlje kao 'korumpirane destinacije' i educiranje adekvatnog turističkog kadra svih razina.A purpose of this doctoral thesis was to explore and analyse the economic impact of foreign direct investment, propose a methodology of evaluating the economic impact of foreign direct investment in tourism of Croatia at the micro and the macro level and, at last, propose the guidelines to attract the appropriate foreign direct investment in tourism of Croatia. At the empirical part of this doctoral thesis the economic impact of foreign direct investment in tourism of Croatia was estimated. The impact was estimated at micro levelthrough an example of foreign-owned hotel and then these effects were consistently linked to the macro level. The economic impact of foreign direct investment in tourism at micro level was assessed through a case study of ‘Terme Tuhelj’. The example of ‘Terme Tuhelj’ showed that a foreign-owned hotel, in less developed country, has a significant development impact on the local economy. In contrast to the negative aspect of foreign investment in Tuhelj which resulted in a loss of local ownership, it has also been identified a number of positive effects that have arisen as a result of the new owner. Perhaps most important of all is to noted that the municipality Tuhelj in the midst of financial crisis has been developing itself. The research of the effects on the macro level was conducted in two parts. In the first part the effects of the portfolio of foreign direct investment in tourism and other relevant control variables on the productivity of the tourism sector was examined through the model of the extended Cobb-Douglas production function. In the second part a cointegration and causality between the portfolio of foreign direct investment and gross value added in tourism, the portfolio of foreign direct investment in tourism and the number of foreign tourist arrivals and the total portfolio of foreign direct investment in Croatia and the portfolio of foreign direct investment in tourism was examined. In the first part of the research at the macro level, the results of the regression showed that the portfolio of foreign direct investment in tourism has a significant positive effect on the productivity of the tourism sector. In other words, the portfolio of foreign direct investment in the tourism sector contributed to the productivity growth of the tourism sector in the observed period. The second part of the research at the macro level, through the VECM model, proved that there is a stable long-term relationship between the portfolio of foreign direct investment and gross value added in tourism. A short-term relationship was also proved, respectively, the causal relationship from the foreign direct investment to gross value added was confirmed through Toda-Yamamoto causality test. Granger and Toda-Yamamoto causality test also proved a short-term relationship, respectively, confirmed the causal relationship of foreign direct investment in tourism to total foreign direct investments in Croatia, and the causal relationship of foreign direct investment in tourism to the number of foreign tourist arrivals. It was concluded that Croatia and its destination should, as soon as possible, in order to become interesting to international foreign capital and thereby ensure the necessary continuity of development and further improvement of competitive ability, first of all, remove, or at least neutralize the significant existing investment restrictions. A special significance for tourism-FDI attraction have political stability, encouraging macroeconomic business conditions, the elimination of administrative and legislative barriers, removing the country's image as a 'corrupted destination' and education of tourism staff on all levels

The Economic Impact of Foreign Direct Investment on Tourism in Croatia

Svrha ovog doktorskog rada bila je istražiti i analizirati ekonomske učinke izravnih inozemnih ulaganja u turizam, predložiti metodologiju vrednovanja ekonomskih učinaka izravnih inozemnih ulaganja u turizam i na primjeru mikrorazine i makrorazine Republike Hrvatske te naposljetku predložiti smjernice za privlačenje adekvatnih izravnih inozemnih ulaganja u turizam Republike Hrvatske. U empirijskom dijelu ovog doktorskog rada procijenjeni su ekonomski učinci izravnih inozemnih ulaganja u turizam na primjeru hotela u inozemnom vlasništvu na mikrolokaciji Republike Hrvatske, a zatim su ti učinci konzistentno povezati s makrorazinom. Ciljem ocjenjivanja ekonomskih učinaka izravnih inozemnih ulaganja u turizam na mikrorazini provedena je studija slučaja 'Terma Tuhelj'. Primjer Terma Tuhelj pokazao je kako jedan hotel u inozemnom vlasništvu, u manje razvijenoj zemlji, ima značajan razvojni učinak na lokalno gospodarstvo. Nasuprot nedostatku inozemnog ulaganja u Terme Tuhelj, čime je došlo do gubitka domaćeg vlasništva, identificirano je mnoštvo pozitivnih učinaka koji su proizašli kao rezultat djelovanja novog vlasnika. Najvažnije od svega je možda naglasiti kako se općina Tuhelj u jeku financijske krize razvijala. Istraživanje učinaka na makrorazini provedeno je u dva dijela. U prvom su dijelu istraživanja ispitani učinci portfelja izravnih inozemnih ulaganja u turizam i ostalih relevantnih kontrolnih varijabli na produktivnosti turističkog sektora putem modela proširene Cobb-Douglasove proizvodne funkcije. U drugom su dijelu istraživanja ispitana kointegracija i uzročnosti portfelja izravnih inozemnih ulaganja i bruto dodane vrijednosti u turizmu, portfelja izravnih inozemnih ulaganja u turizam i broja dolazaka inozemnih turista, te ukupnog portfelja izravnih inozemnih ulaganja u Republiku Hrvatsku i portfelja izravnih inozemnih ulaganja u turistički sektor. U prvom dijelu istraživanja na makrorazini, rezultati provedene regresije pokazali su kako portfelj izravnih inozemnih ulaganja u turizam ima pozitivan signifikantan učinak na produktivnost turističkog sektora. Drugim riječima, portfelj izravnih inozemnih ulaganja u turističkom sektoru utjecao je na rast produktivnosti turističkog sektora u promatranom razdoblju. Drugi dio makroistraživanja dokazao je VECM modelom kako postoji stabilna dugoročna veza između portfelja izravnih inozemnih ulaganja i bruto dodane vrijednosti u turizmu. Toda-Yamamotovim testom uzročnosti dokazana je i kratkoročna veza, odnosno potvrđena je uzročna veza od izravnih inozemnih ulaganja k bruto dodanoj vrijednosti. Također je Grangerovim i Toda-Yamamotovim testom uzročnosti dokazana kratkoročna veza, odnosno potvrđena je uzročna vezu od izravnih inozemnih ulaganja u turizam k ukupnim izravnim inozemnim ulaganjima u Republiku Hrvatsku te uzročna veza od izravnih inozemnih ulaganja u turizam k broju dolazaka inozemnih gostiju. Zaključeno je kako Hrvatska i njene destinacije trebaju, kako bi što skorije postale zanimljive međunarodnom inozemnom kapitalu te si time osigurale nužni razvojni kontinuitet i dodatno unapređenje konkurentske sposobnosti, prije svega, ukloniti ili makar neutralizirati značajna postojeća investicijska ograničenja. Za izravna inozemna ulaganja u turizam od posebnog je značaja politička stabilnosti regije, poticajni makroekonomski uvjeti poslovanja, otklanjanje administrativnih i zakonodavnih barijera, otklanjanje imidža zemlje kao 'korumpirane destinacije' i educiranje adekvatnog turističkog kadra svih razina.A purpose of this doctoral thesis was to explore and analyse the economic impact of foreign direct investment, propose a methodology of evaluating the economic impact of foreign direct investment in tourism of Croatia at the micro and the macro level and, at last, propose the guidelines to attract the appropriate foreign direct investment in tourism of Croatia. At the empirical part of this doctoral thesis the economic impact of foreign direct investment in tourism of Croatia was estimated. The impact was estimated at micro levelthrough an example of foreign-owned hotel and then these effects were consistently linked to the macro level. The economic impact of foreign direct investment in tourism at micro level was assessed through a case study of ‘Terme Tuhelj’. The example of ‘Terme Tuhelj’ showed that a foreign-owned hotel, in less developed country, has a significant development impact on the local economy. In contrast to the negative aspect of foreign investment in Tuhelj which resulted in a loss of local ownership, it has also been identified a number of positive effects that have arisen as a result of the new owner. Perhaps most important of all is to noted that the municipality Tuhelj in the midst of financial crisis has been developing itself. The research of the effects on the macro level was conducted in two parts. In the first part the effects of the portfolio of foreign direct investment in tourism and other relevant control variables on the productivity of the tourism sector was examined through the model of the extended Cobb-Douglas production function. In the second part a cointegration and causality between the portfolio of foreign direct investment and gross value added in tourism, the portfolio of foreign direct investment in tourism and the number of foreign tourist arrivals and the total portfolio of foreign direct investment in Croatia and the portfolio of foreign direct investment in tourism was examined. In the first part of the research at the macro level, the results of the regression showed that the portfolio of foreign direct investment in tourism has a significant positive effect on the productivity of the tourism sector. In other words, the portfolio of foreign direct investment in the tourism sector contributed to the productivity growth of the tourism sector in the observed period. The second part of the research at the macro level, through the VECM model, proved that there is a stable long-term relationship between the portfolio of foreign direct investment and gross value added in tourism. A short-term relationship was also proved, respectively, the causal relationship from the foreign direct investment to gross value added was confirmed through Toda-Yamamoto causality test. Granger and Toda-Yamamoto causality test also proved a short-term relationship, respectively, confirmed the causal relationship of foreign direct investment in tourism to total foreign direct investments in Croatia, and the causal relationship of foreign direct investment in tourism to the number of foreign tourist arrivals. It was concluded that Croatia and its destination should, as soon as possible, in order to become interesting to international foreign capital and thereby ensure the necessary continuity of development and further improvement of competitive ability, first of all, remove, or at least neutralize the significant existing investment restrictions. A special significance for tourism-FDI attraction have political stability, encouraging macroeconomic business conditions, the elimination of administrative and legislative barriers, removing the country's image as a 'corrupted destination' and education of tourism staff on all levels