REGIONAL COOPERATION AND ECONOMIC INTEGRATION

CEFTA-2006 TRADE COOPERATION
Ivo Družić, PhD,
Full Professor
Faculty of Economics and Business,
Zagreb, Croatia
Marija Penava,
Teaching & Research Assistant
Faculty of Economics and Business,
Zagreb, Croatia
Tomislav Sekur,
Teaching & Research Assistant
Faculty of Economics and Business,
Zagreb, Croatia
Abstract
DYNAMICS AND COMPOSITION OF TRADE RELATIONS
BETWEEN CROATIA AND CEFTA 2006 COUNTRIES
Structural and dynamical aspects of foreign trade and capital flows between international
markets, Croatia and the CEFTA 2006 region have profound macroeconomic impact in
actual global economic scene. Thus comparative merchandise trade analysis between
Croatia and countries in the region and their competitiveness on international financial
market has been required. Therefore, the first part of the paper deals with trends analysis
of foreign trade flows between Croatia and its neighbors. The accentuation has been laid
upon merchandise trade composition and direction analysis with CEFTA 2006 countries,
and especially upon structural shifts in foreign trade balance at bilateral and multilateral
levels. The impact of dynamic merchandise trade growth between Croatia and CEFTA
2006 on increasing imbalance with bilateral partners, as possible hindrance to further
trade growth within the region has been investigated. The paper analytically evaluates
possible impact of trade and financial flows growth among CEFTA 2006 member states on
balancing their current account usually suffering from serious overall deficit. The second
part focuses on Croatia and CEFTA 2006 countries efficiency in approaching international
financial markets. Emphasis is put on capital account composition shifts, especially FDI
flows. FDI concentration index has been employed as a measure of FDI attraction efficacy,
and as competitiveness indicator of Croatia and CEFTA 2006 countries on international
markets. Accentuation has been put on long term trends and efficacy of each country’s FDI
attraction. Degree of adaptability on actual fluctuation in global financial markets has
been examined. Special part of analysis includes international FDI flows within CEFTA
2006 with special reference to Croatian FDI flows to the region.
Key words: Croatia, CEFTA 2006, FDI, Foreign trade, South East Europe, Western
Balkans.
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