THE ROLE OF HUMAN AND ENTERPRENEURSHIP CAPITAL ON ECONOMIC GROWTH IN CROATIA

The main objective of this paper is to examine the role of entrepreneurship and human capital on economic growth in Croatia. Following the neoclassical model of growth introduced by Robert Solow, Romer and others have expanded the model to include measures of human capital. More recently Audretsch and Keilbach introduced a new factor to the production function, entrepreneurship capital. In this paper a production function model including measures of human and entrepreneurship capital is estimated for Croatia. The results are then used to suggest a new direction for policy that focuses on instruments to enhance main factors of economic growth.