Cointegration, economic growth, error correction model, export, foreign direct investment
Foreign direct investment is generally considered to be an instrument how to stimulate economic growth of any country. For this purpose governments of transition countries try to encourage the inflow of foreign direct investment by various measures. The aim of this paper is to analyse the relation between foreign direct investment, economic growth and export in Croatia. For this purpose we apply cointegration analysis along with the vector error correction model. The results confirm the existence of a long-term relation between the variables analysed. We reveal a positive impact of GDP and negative impact of foreign direct investment on export.