Foreign Direct Investment in the Function of Economic Development - Example of Selected Countries in the Western Balkans

Domazet, Ivana S.; Marjanović, Darko Milivoj

doi:10.18052/www.scipress.com/ILSHS.79.1

ILSHS > ILSHS Volume 79 > Foreign Direct Investment in the Function of...

< Back to Volume

Foreign Direct Investment in the Function of Economic Development - Example of Selected Countries in the Western Balkans

Full Text PDF

Abstract:

The main aim of this work is to determine, on the basis of empirical research, whether and to what extent foreign direct investment has impact on the overall economic development of selected countries in the Western Balkans. Analyses made for the purpose of this paper were performed on the basis of available secondary data possessed by the World Bank for the period of 2000-2012. The research methodology involved the use of the techniques of linear regression and correlation analysis. The first task was to determine whether there is an impact of foreign direct investment on the overall economic development of these countries. Where such influence occurred, it was necessary to define its level in comparison to the influence of other variables. The results of the analysis in this paper suggest that inflow of foreign direct investment does not affect to a significant extent the economic development of selected countries in the Western Balkans.

Info:

Periodical:

International Letters of Social and Humanistic Sciences (Volume 79)

Pages:

1-15

DOI:

https://doi.org/10.18052/www.scipress.com/ILSHS.79.1

Citation:

I. S. Domazet and D. M. Marjanović, "Foreign Direct Investment in the Function of Economic Development - Example of Selected Countries in the Western Balkans", International Letters of Social and Humanistic Sciences, Vol. 79, pp. 1-15, 2017

Online since:

October 2017

Authors:

Ivana S. Domazet, Darko Milivoj Marjanović

Keywords:

Economic Development, Exports, Foreign Direct Investment, GDP, Imports

Export:

RIS, BibTeX, Text

Distribution:

Open Access

This work is licensed under a
Creative Commons Attribution 4.0 International License

References:

[1] C. Rodriguez, R. Bustillo, Foreign direct investment and the business cycle: new insights after the great recession, Prague Economic Papers. 24(2) (2015) 136-153.

DOI: https://doi.org/10.18267/j.pep.505

[2] G. Wamser, Foreign (in)direct investment and corporate taxation, Canadian Journal of Economics/Revue canadienne d'Economique. 44(4) (2011)1497-1524.

DOI: https://doi.org/10.1111/j.1540-5982.2011.01682.x

[3] J. Forssbæck, L. Oxelheim, Corporate financial determinants of foreign direct investment, The Quarterly Review of Economics and Finance. 51 (2011) 269-282.

DOI: https://doi.org/10.1016/j.qref.2011.05.002

[4] H. Nishiyama, M. Yamaguchi, Foreign direct investment, international trade, and firm heterogeneity, Economic Modelling. 27 (2010) 184-195.

DOI: https://doi.org/10.1016/j.econmod.2009.08.005

[5] D. Marjanović, P. Radojević, Foreign direct investments as an engine of economic growth and development of Serbia, in: H. Hanić et al. (Eds. ), Post Crisis Recovery, BBA, IES, Belgrade, Serbia, 2013, pp.349-364.

[6] O. Morrissey, M. Udomkerdmongkol, Governance, private investment and foreign direct investment in developing countries, World Development. 40(3) (2012) 437-445.

DOI: https://doi.org/10.1016/j.worlddev.2011.07.004

[7] U. Nwaogu, M. Ryan, FDI, Foreign aid, remittance and economic growth in developing countries, Review of Development Economics. 19(1) (2015) 100-115.

DOI: https://doi.org/10.1111/rode.12130

[8] G. De Simone, M. Manchin, Outward migration and inward FDI: factor mobility between Eastern and Western Europe, Review of International Economics. 20(3) (2012) 600-615.

DOI: https://doi.org/10.1111/j.1467-9396.2012.01041.x

[9] P. Hlavacek, B. Bal-Domanska, Impact of foreign direct investment on economic growth in Central and Eastern European countries, Engineering Economics. 27(3) (2016) 294-303.

DOI: https://doi.org/10.5755/j01.ee.27.3.3914

[10] C. Russu, Foreign direct investment in the European Union, Economic Insights-Trends and Challenges. V(1) (2016) 51-63.

[11] V. Castro, The impact of the European Union fiscal rules on economic growth, Journal of Macroeconomics. 33 (2011) 313–326.

DOI: https://doi.org/10.1016/j.jmacro.2010.09.003

[12] OECD, Attracting Foreign Direct Investment for Development, Paris, (2002).

[13] M. Alguacil, A. Cuadros, V. Orts, Inward FDI and growth: the role of macroeconomic and institutional environment, Journal of Policy Modeling. 33 (2011) 481-496.

DOI: https://doi.org/10.1016/j.jpolmod.2010.12.004

[14] D.G. Neto, F.J. Veiga, Financial globalization, convergence and growth: The role of foreign direct investment, Journal of International Money and Finance. 37 (2013) 161-186.

DOI: https://doi.org/10.1016/j.jimonfin.2013.04.005

[15] A. Zdravković I. Domazet, V. Nikitović, Uticaj demografskog starenja na održivost javnih finansija u Srbiji, Stanovništvo. 50(1) (2012) 19-44. (in Serbian).

[16] E. Demirhan, M. Masca, Determinants of foreign direct investment flows to developing countries: a cross-sectional analysis, Prague Economic Papers. 17(4) (2008) 356-369.

DOI: https://doi.org/10.18267/j.pep.337

[17] I. Domazet, D. Filimonović, O. Pantić, Trgovina i pristup EU - primer Srbije, Ekonomika preduzeća. 62(3-4) (2014) 217-227. (in Serbian).

DOI: https://doi.org/10.5937/ekopre1404217d

[18] D.T. Wang et al., When does FDI matter? The roles of local institutions and ethnic origins of FDI, International Business Review. 22 (2013) 450-465.

DOI: https://doi.org/10.1016/j.ibusrev.2012.06.003

[19] J. Gorbunova, D. Infante, J. Smirnova, New evidence od FDI determinants: an appraisal over the transition period, Prague Economic Papers. 21(2) (2012) 129-149.

DOI: https://doi.org/10.18267/j.pep.415

[20] D. Dharmapala, N. Riedel, Earnings shocks and tax-motivated income-shifting: evidence from European multinationals, Journal of Public Economics. 97 (2013) 95-107.

DOI: https://doi.org/10.1016/j.jpubeco.2012.08.004

[21] B.G. Buchanan, Q.V. Le, M. Rishi, Foreign direct investment and institutional quality: some empirical evidence, International Review of Financial Analysis. 21 (2012) 81-89.

DOI: https://doi.org/10.1016/j.irfa.2011.10.001

[22] A. Dis Oladottir et al., Strategic complexity and global expansion: an empirical study of newcomer Multinational Corporations from small economies, Journal of World Business. 47 (2012) 686-695.

DOI: https://doi.org/10.1016/j.jwb.2011.08.003

[23] UNCTAD, World investment report, New York and Geneva, 2010-(2013).

[24] S.S. Makki Somwaru, Impact of Foreign Direct Investment and trade on economic growth: evidence from developing countries, American Journal of Agricultural Economics. 86 (2004) 795-801.

DOI: https://doi.org/10.1111/j.0002-9092.2004.00627.x

[25] M. Mahmoodi, E. Mahmoodi, Foreign direct investment, exports and economic growth: evidence from two panels of developing countries, Economic Research – Ekonomska istrazivanja. 29(1) (2016) 938-949.

DOI: https://doi.org/10.1080/1331677x.2016.1164922

[26] X.B. Liu, Relationships between economic growth, foreign direct investment and trade: evidence from China, Applied Economics. 34(1) (2002) 1433-1440.

DOI: https://doi.org/10.1080/00036840110100835

[27] H.K. Nath, Trade, foreign direct investment and growth: Evidence from transition economies, Comparative Economic Studies. 51 (2009) 20-50.

DOI: https://doi.org/10.1057/ces.2008.20

[28] B. Ćorić, G. Pugh, Foreign direct investment and output growth volatility: a worldwide analysis, International Review of Economics and Finance. 25 (2013) 260-271.

DOI: https://doi.org/10.1016/j.iref.2012.07.011

[29] UNCTAD, Towards a new generation of invetment policies, New York and Geneva, (2012).

[30] M. Mehrara et al., Dynamic causal relationships among GDP, exports, and Foreign Direct Investment (FDI) in the developing countries, International Letters of Social and Humanistic Sciences. 14 (2014) 1-19.

DOI: https://doi.org/10.18052/www.scipress.com/ilshs.14.1

[31] M. Mehrara, F. Ghamati, Financial development and economic growth in developed countries, International Letters of Social and Humanistic Sciences. 36 (2014) 75-81.

DOI: https://doi.org/10.18052/www.scipress.com/ilshs.36.75

[32] V. Botrić, Foreign direct investment in the western Balkans: Privatization, institutional change, and banking sector dominance, Economic Annals. 55 (187) 7-30.

DOI: https://doi.org/10.2298/eka1087007b

[33] S. Estrin, M. Uvalic, Foreign Direct Investment in the Western Balkans: what role has it playes during transition, Comparative Economic Studies. 58(3) (2016) 455-483.

DOI: https://doi.org/10.1057/ces.2016.10

[34] J. Deichmann, Historical legacies and Foreign Direct Investment in Bosna and Herzegovina, South East European Journal of Economics and Business. 7(1) (2012) 7-18.

DOI: https://doi.org/10.2478/v10033-012-0001-y

[35] D. Jacimovic, M Jocovic, Foreign Investment and Trade in the Western Balkan – focus on economic and legal system, Journal of Advanced Management Science. 2(4) (2014) 301-305.

DOI: https://doi.org/10.12720/joams.2.4.301-305

[36] Z. Murgasova et al., The Western Balkans: 15 years of economic transition, IMF, Washington, (2015).

[37] G.H. Popescu, FDI and economic growth in Central and Eastern Europe, Sustainability. 6(11) (2014) 8149-8163.

DOI: https://doi.org/10.3390/su6118149

[38] L.P. Dana, When economies change hands: a survey of entrepreneurship in the emerging markets of Europe from the Balkans to the Baltic states, Routledge, New York & London, (2010).

DOI: https://doi.org/10.4324/9780203049013

[39] J. Žugić, Foreign Direct Investment and Global Economic Crisis in the Western Balkans, Journal on European Perspectives of the Western Balkans. 3(1) (2011) 69-90.

[40] N. Baltaci, M. Sahin, Relationship between Tax Regulations and Direct Foreign Capital: case of Balkan countries, Turkish Economic Review. 3(4) (2016) 642-651.

[41] C. Chen, Information, incentives and multinational firms, Journal of International Economics. 85 (2011) 147–158.

[42] Z. Vukanović, Foreign Direct Investment inflows into the South East European media market: towards a hybrid business model, Springer, (2016).

DOI: https://doi.org/10.1007/978-3-319-30512-7

[43] A. Bitzenis, The Balkans: Foreign Direct Investment and EU accession, Ashgate, (2013).

[44] I. Kersan-Škabić, The importance of Corporate Taxation for FDI attractiveness of Southeast European countries, Paneconomicus. 62(1) (2015) 105-122.

DOI: https://doi.org/10.2298/pan1501105k

[45] T. Balliu, A. GaceLlozana, Commonalities and differences of tax system in West Balkan countries. Comparative analysis, European Journal of Social Sciences, Education and Research. 3(1) (2015) 157-164.

DOI: https://doi.org/10.26417/ejser.v3i1.p155-162

[46] J. Becker et al., Corporate tax effects on the quality and quantity of FDI, European Economic Review. 56(8) (2012) 1495-1511.

DOI: https://doi.org/10.1016/j.euroecorev.2012.07.001

[47] H. Šimović, M. Mihelja Žaja, Tax incentives in Western Balkan vountries, International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering. 4(6) (2010) 731-736.

[48] M. Yuce, R.A.F. Mercimek, Investments and investment incentives in the Balkan states, Annals of the Constantin Brancusi, University of Targu Jiu. 2 (2016) 53-64.

[49] S. Leiser, The diffusion of state tax incentives for business, Public Finance Review. 45(3) (2015) 334-363.

DOI: https://doi.org/10.1177/1091142115611741

Show More Hide

Cited By:

[1] D. Pavlović, I. Domazet, M. Lazić, "The Impact of Education on the Youth Labour Market in Serbia", International Letters of Social and Humanistic Sciences, Vol. 83, p. 11, 2018

DOI: https://doi.org/10.18052/www.scipress.com/ILSHS.83.11

[2] M. Šušić, "Influence of foreign direct investments on economic development of the Republic of Serbia", Journal of Process Management. New Technologies, Vol. 6, p. 50, 2018

DOI: https://doi.org/10.5937/jouproman6-18873

[3] D. Marjanović, I. Domazet, Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization, p. 96, 2021

DOI: https://doi.org/10.4018/978-1-7998-4459-4.ch006

[4] D. Marjanović, I. Domazet, Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization, p. 96, 2021

DOI: https://doi.org/10.4018/978-1-7998-4459-4.ch006

Show More Hide