Examining the Export-led Growth Hypothesis: The case of Croatia

Vlatka Bilas; Mile Bošnjak; Sanja Franc

Vlatka Bilas
Mile Bošnjak
Sanja Franc

Keywords: gross domestic product, export, Croatia, Granger causality

Abstract

This paper examines the relationship between gross domestic product and exports of goods and services in Croatia between 1996 and 2012. The research results confirmed unidirectional Granger causality from the exports of goods and services to gross domestic product. Following the Engle-Granger approach to cointegration, long-term equilibrium as well as short-term correlation between the observed variables was identified. Exports of goods and services and gross domestic product (GDP) in Croatia move together. If the two observed variables move away from equilibrium, they will return to their long-term equilibrium state at a velocity of 24.46% in the subsequent period. In accordance with the results, we found evidence supporting the export-led growth hypothesis in Croatia. As the outcomes indicated, to recover the economy, Croatia should put more emphasis on the development of exporting sectors.

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Author Biographies

Vlatka Bilas

University of Zagreb, Faculty of Economics and Business, Croatia
E-mail: vbilas@efzg.hr

Vlatka Bilas currently works at the Faculty of Economics and Business, University of Zagreb, as an associate professor in the International Economic Department.She actively participates in preparing and conducting classes for the courses International Economics and Regional Economic Integrations at the Faculty of Economics and Business as well as Entrepreneurship and Exports in High Technologies at Faculty of Electrical Engineering and Computing, University of Zagreb. The author has participated in various professional and scientific projects, workshops, and more than 20 scientific conferences. She has published more than 70 papers

Mile Bošnjak

SKDD – CCP Smart Clear Ltd Zagreb, Croatia
E-mail: mile.bosnjak@inet.hr

Mile Bošnjak currently works as the manager of risk control in SKDD–CCP Smart Clear Ltd. He earned his doctorate degree in international economics from the Faculty of Economics and Business, University of Zagreb. Bošnjak also works in the International Economic Department at the Faculty of Economics and Business, University of Zagreb, and at the School of Health Studies, University of Mostar, as a subcontracted teaching assistant. He has published several papers and has participated in several international conferences.

Sanja Franc

University of Zagreb, Faculty of Economics and Business, Croatia
E-mail: sfranc@efzg.hr

Sanja Franc currently works at the Faculty of Economics and Business, University of Zagreb, as a senior assistant in the International Economic Department. She actively participates in preparing and conducting classes for the courses International Economics and Regional Economic Integrations at the Faculty of Economics and Business, University of Zagreb. The author has participated in various professional and scientific projects and workshops and has conducted lectures at more than 15 scientific conferences. She has published more than 50 scientific and professional papers.

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