Cointegration analysis and VECM of FDI, employment, export and GDP in Croatia (2002?2017) with particular reference to the global crisis and poor macroeconomic governance

Research background: The preconditions for attracting foreign investment are political stability and long-term capital investment, positively influencing the recipient country's development. During crisis as well in unstable environment, economic agents engage speculative risky acts faster earnings. Purpose of article: paper aims to point out importance direct investments (FDI) other macroeconomic variables their relationship with particular reference Croatian economy 2002-2017. Methods: We use ADF test, development VECM model, testing decomposition variance predictive errors variables, analysis responses unit orthogonal pulses. vector correction auto-regression model (VECM) explores between indicators time. Findings & Value-added: Applying we find that employment, export, GDP exogenous short term. FDI variable is statistically significant adjusts long-run equilibrium. Analyzing shocks, conclude there weak feedback observed a effect economy. does not affect GDP, exports Croatia due poor management, corruption, regional development, inefficiency, inefficient structure.