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Effects of Private Ownership, Trade, and Foreign Direct Investment on Labor Productivity Growth in Transition Economies: Evidence from the Croatian Manufacturing Industry

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  • Goran Vukšić

Abstract

In this study, we investigate the determinants of labor productivity dynamics in transition economies using data from Croatian manufacturing industries. Capital intensity growth and human capital accumulation have been significant contributors to stronger productivity gains. Private-sector development has positively affected productivity growth—but mostly through the increasing role of new private companies. Still, unfinished privatization represents a significant obstacle to stronger productivity gains. The effect of increasing trade openness is significant but negative, most likely owing to weak export competitiveness of Croatian companies. Neither greenfield nor (predominant) brownfield foreign direct investment inflows have contributed to higher labor productivity growth. Further privatization and structural reforms seem to be the most promising policy measures that need to be undertaken in order to achieve higher productivity gains.

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  • Goran Vukšić, 2016. "Effects of Private Ownership, Trade, and Foreign Direct Investment on Labor Productivity Growth in Transition Economies: Evidence from the Croatian Manufacturing Industry," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(2), pages 322-335, February.
    • Handle: RePEc:mes:emfitr:v:52:y:2016:i:2:p:322-335
    DOI: 10.1080/1540496X.2015.1011540
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    3. Iwasaki, Ichiro & 岩﨑, 一郎 & Tokunaga, Masahiro, 2019. "The Determinants and Macroeconomic Impacts of Foreign Direct Investment in Transition Economies," CEI Working Paper Series 2019-8, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.

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