THE IMPACT OF FDI IN INFORMATION COMMUNICATION TECHNOLOGIES ON ECONOMIC PERFORMANCES IN CROATIA

Information communication technology and its application is becoming an increasingly important element in achieving competitiveness and efficiency of economic growth. Considering that the current economic growth of Croatia was based on traditional, old economy, indicating that the application of information communication technology is falling behind developed countries, Foreign direct investments, in generally, increased dramatically in the last few years, but the investments are not distributed equally and developing countries, such as Croatia, face difficulties in attracting foreign investors. A research is conducted on the cause link between the foreign investments in information technology sector and two variables - GDP growth and export. By conducting scientifically-based analysis this paper proves that investments in the information communication technology sector contribute positively to the growth of GDP and export. The hypotheses that are confirmed are also compared to scientific research of previous authors for different European Union countries. Except for unquestionable positive effects, the paper summarizes possible negative effects of foreign direct investments in information technology sector presenting results of mostly foreign researches. In conclusion the paper suggests that the foreign investments are the main key for development of information communication technology sector making it important precondition for achieving better competitiveness. Methods used in this paper are methods of compilation, statistical methods, descriptive method of analysis and methods of time series. The aim of this paper is to examine, analyze and define to which extent foreign direct investments (FDI) in information communication technology (ICT), affect economic growth of Croatia.