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The Future Of Fdi In South Eastern European Countries: Messages From New Eu Member States

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  • Slavica Penev
  • Matija Rojec

Abstract

This paper looks at the interlinking of inward FDI, EU accession, and transition-related structural reform processes, and identifies the largest lags of SEE-6 countries in EU accession and transition processes, whose removal would have a positive impact on inward FDI. The analysis is based on EBRD Transition Indicators, the World Bank Doing Business Index, and the World Bank Governance Index. We find an obvious correlation of inward FDI, transition, and EU accession processes of NMS-10 countries and claim that SEE-6 countries will broadly follow the same pattern: their relative position as FDI recipients will gradually improve along with the progress of EU accession and transition processes. The analysis identifies the following main gaps of the SEE-6 in these processes: (i) in terms of economic system development - enterprise restructuring and governance, and sectoral reforms in energy, infrastructure, capital markets, and private equity; (ii) in terms of the governance of economy and society at large - regulatory quality and rule of law; and (iii) in terms of the business environment - dealing with construction permits, enforcing contracts, and registering property. Progress in narrowing down these gaps would mean a step forward in EU accession and transition, and consequently an improvement of SEE-6 countries’ positions as locations for inward FDI.

Suggested Citation

  • Slavica Penev & Matija Rojec, 2014. "The Future Of Fdi In South Eastern European Countries: Messages From New Eu Member States," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 59(202), pages 43-68, July – Se.
  • Handle: RePEc:beo:journl:v:59:y:2014:i:202:p:43-68
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    References listed on IDEAS

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    Cited by:

    1. Dimitar NIKOLOSKI, 2017. "The impact of Foreign Direct Investments on employment: the case of the Macedonian manufacturing sector," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 147-165, December.
    2. Marija Radulović, 2020. "The Impact Of Institutional Quality On Economic Growth: A Comparative Analysis Of The Eu And Non-Eu Countries Of Southeast Europe," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(225), pages 163-182, April – J.

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    More about this item

    Keywords

    Foreign direct investment; transition process; EU accession process transition countries;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General

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