The EU model of market integration, based on financial openness, leads to divergence and sectoral specialization, which makes the convergence of Central and East European EU countries (CEE) in the EU questionable. The idea of the paper is that forms of foreign direct investment (FDI) have a differential effect on the growth and development of countries—i.e., it is assumed that FDI inflows into the manufacturing sector have a greater intensity and impact on economic growth than inflows into the services sector. Therefore, the aim of this paper is to analyze the system determinants and transmission mechanisms of the sectoral structure of FDI inflows on the sample of 10 CEE for the period 1995–2019. Following a critical analysis of previous research, a panel model was constructed in the empirical section. A developed credit market and the purchasing power of residents lead to greater capital inflows into the services sector, while a higher GDP growth rate and a depreciated real exchange rate lead to higher inflows into the manufacturing sector. The conclusion of the paper is that changing the structure of the domestic economy based on clear industrial and investment policies is the best way to attract developmentally efficient FDI.

The paper argues that it is impossible to resolve the public debt problem within the existing economic policy model without changing the conceptual relationship between monetary and fiscal policy, i.e. without reconfirming the...

Croatia is characterised by a foreign direct investment (FDI) inflow, mainly in the service sector, which is partly understandable owing to the country's orientation towards tourism. On the other hand, theoretical and empirical research indicates a weak impact of FDI in the service sector on the economic growth of the recipient country. Following the theoretical framework and critical analysis of previous research, the paper, on the example of Croatia in the period q1/2000 - q3/2020, uses the VAR model to analyse the mutual influence of GDP growth rate and FDI in the service sector. The results show that the impact of the GDP growth rate on the FDI inflow into the service sector is more significant and longer lasting than vice versa. The paper emphasises the importance of the adopted growth model for the type of FDI inflows into the recipient country, which in this case is characterised by the appreciation of the real exchange rate as an indicator of the country's competitiveness, whose impact on FDI inflow into the service sector is positive and long lasting.