Transformations  in
Business & Economics

Competitiveness of Croatian Economy
Maja Biljan-August

ABSTRACT. The major interest of this paper is to determine the position of Croatia in conditions of global competitiveness and to measure up Croatia to the EU and Candidate Countries. The method of analysis, which is used in the research to compare Croatian economy with selected countries, enables more specific analysis of the factors, which triggered low competitiveness of Croatian economy, especially when the national market is small, and foreign trade deficit is high with the continuing tendency of increase. This paper aimed to:

• investigate whether Croatian economy is competitive compared to transition countries accessing the EU;
• identify trends in the foreign trade exchange in order to determine whether Croatian economy can penetrate the EU market. This is especially important regarding the process of stabilization and association, which Croatia entered in order to gain a full membership to the EU within this decade. To reach the Candidate Countries’ level, Croatia needs to improve all economic indicators. Finding the solution to export problems is the priority. Therefore, focusing on development of technologies and innovations, as well as small and medium entrepreneurship should help Croatia form competitive products in the market.

KEYWORDS: Croatia, transition, export, competitiveness, revealed comparative advantage.