IDEAS home Printed from https://ideas.repec.org/a/beo/journl/v55y2010i187p7-30.html
   My bibliography  Save this article

Foreign Direct Investments In Western Balkans: Privatization, Institutional Change And Banking Sector Dominance

Author

Listed:
  • Valerija Botrić

Abstract

The paper provides analysis of foreign direct investment (FDI) dynamics and its determinants for the group of countries lately referred to as Western Balkans (non-EU ex-Yugoslavia countries plus Albania). Due to vulnerable external positions and enhanced funding requirements related to the EU accession and catching-up, FDI is often highly welcomed by government officials in the South East European (SEE) countries. The notion that FDI is frequently accompanied by knowledge and know-how transfer makes this source of capital growth even more desirable than simple capital accumulation from frequently inadequate domestic savings. The analysis of the FDI determinants on the overall economy level conducted within the panel data framework aims to provide the answer whether the same factors as in Central and Eastern European countries, now new EU member states, are relevant for the sampled countries. Due to data limitations and the frequent emergence of new countries in the region, the analysis does not extend to the early transition period. Since it entails the beginning of the financial crisis, the comparison of the results obtained with those of previous studies will enable the discussion of internal versus external factors of FDI attraction in the region.

Suggested Citation

  • Valerija Botrić, 2010. "Foreign Direct Investments In Western Balkans: Privatization, Institutional Change And Banking Sector Dominance," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 55(187), pages 7-31, October –.
    • Handle: RePEc:beo:journl:v:55:y:2010:i:187:p:7-30
    as

    Download full text from publisher

    File URL: http://www.ekof.bg.ac.rs/wp-content/uploads/2014/06/187-1-1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tommaso Perez, 1997. "Multinational enterprises and technological spillovers: An evolutionary model," Journal of Evolutionary Economics, Springer, vol. 7(2), pages 169-192.
    2. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
    3. repec:bla:econom:v:41:y:1974:i:162:p:176-93 is not listed on IDEAS
    4. Anindya Banerjee & Massimiliano Marcellino & Chiara Osbat, 2005. "Testing for PPP: Should we use panel methods?," Empirical Economics, Springer, vol. 30(1), pages 77-91, January.
    5. Arjun S. Bedi & Andrzej Cielik, 2002. "Wages and wage growth in Poland: The role of foreign direct investment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(1), pages 1-27.
    6. Bellak, Christian & Leibrecht, Markus & Riedl, Aleksandra, 2008. "Labour costs and FDI flows into Central and Eastern European Countries: A survey of the literature and empirical evidence," Structural Change and Economic Dynamics, Elsevier, vol. 19(1), pages 17-37, March.
    7. Sanjay Kathuria, 2008. "Western Balkan Integration and the EU : An Agenda for Trade and Growth," World Bank Publications - Books, The World Bank Group, number 6446.
    8. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
    9. World Bank, 2010. "World Development Indicators 2010," World Bank Publications - Books, The World Bank Group, number 4373.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Valerija Botric & Tanja Broz & Sasa Jaksic, 2019. "Business Cycle Synchronisation with the Euro Area Countries at Times of Crisis: Differences Between SEE and CEE Countries," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 17(2), pages 175-191.
    2. Krasniqi, Besnik & Ahmetbasić, Jasmina & Bartlett, Will, 2022. "Foreign direct investment and backward spillovers in the Western Balkans: the context, opportunities and barriers to the development of regional supply chains," LSE Research Online Documents on Economics 115391, London School of Economics and Political Science, LSE Library.
    3. Balaban, Suzana & Živkov, Dejan & Milenković, Ivan, 2019. "Impact of an unexplained component of real exchange rate volatility on FDI: Evidence from transition countries," Economic Systems, Elsevier, vol. 43(3).
    4. Savićević Marko & Kostić Milan, 2020. "The Impact Analysis of Foreign Direct Investment on Export: The Case of the Western Balkan Countries," Economic Themes, Sciendo, vol. 58(2), pages 171-186, June.
    5. Oltiana Muharremi, 2020. "Discussion: Challenges and Recent Developments of Foreign Direct Investments in Albania and Western Balkan Countries," Central European Business Review, Prague University of Economics and Business, vol. 2020(4), pages 96-111.
    6. Amir Fejzić, 2017. "Sectorial Composition Of Foreign Direct Investment And Growth: The Case Of The See-5," Ekonomske ideje i praksa, Faculty of Economics and Business, University of Belgrade, issue 24, pages 87-116, March.
    7. Elena Baranenko & Sasa Milivojevic, 2011. "The Western Balkan Countries Relations withe EU Development and Perspectives," Book Chapters, in: Stefan Bogdan Salej & Dejan Eric & Srdjan Redzepagic & Ivan Stosic (ed.), Contemporary Issues in the Integration Processes of Western Balkan Countries in the European Union, chapter 7, pages 88-104, Institute of Economic Sciences.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Chengqi & Deng, Ziliang & Kafouros, Mario I. & Chen, Yan, 2012. "Reconceptualizing the spillover effects of foreign direct investment: A process-dependent approach," International Business Review, Elsevier, vol. 21(3), pages 452-464.
    2. Hoekman, Bernard & Saggi, Kamal, 1999. "Multilateral disciplines for investment-related policies," Policy Research Working Paper Series 2138, The World Bank.
    3. Marcella Nicolini & Laura Resmini, 2006. "The Impact of Mnes on Domestic Firms in CEECS: A Micro-Econometric Approach," ERSA conference papers ersa06p411, European Regional Science Association.
    4. Can Li & Danxue Gao & Weiguo Zhong, 2020. "A Political Cycle of Regional FDI Spillovers in an Emerging Market: Evidence from China," Management International Review, Springer, vol. 60(2), pages 151-176, April.
    5. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
    6. Bhavesh Garg & Pravakar Sahoo, 2021. "DO DIFFERENT TYPES OF CAPITAL INFLOWS HAVE DIFFERENTIAL IMPACT ON OUTPUT? Evidence from Time series and Panel Analysis," IEG Working Papers 443, Institute of Economic Growth.
    7. Nguyen Khac Minh & Nguyen Viet Hung & Pham Van Khanh & Ha Quynh Hoa, 2014. "Do Direct Foreign Investments Increase Efficiency Convergence at Firm Level? The Case of Vietnam, 2000-2011," International Journal of Business and Social Research, LAR Center Press, vol. 4(7), pages 109-119, July.
    8. Sapienza, Elvira, 2010. "FDI and Growth in Eastern Europe: A Sectoral Analysis - Investimenti diretti e crescita in est-Europa: un’analisi settoriale," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(4), pages 451-475.
    9. Marzieh Abolhassani & Seçil Hülya Danakol, 2019. "Wage and competition channels of foreign direct investment and new firm entry," Small Business Economics, Springer, vol. 53(4), pages 935-960, December.
    10. Sivakumar, P. & Patnaik, K. Uma Shankar, 2005. "Economic Reforms and Technical Efficiency Performance in Indian Manufacturing Sector," Conference papers 331420, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Subash Sasidharan, 2006. "Foreign Direct Investment and Technology Spillovers:Evidence from the Indian Manufacturing Sector," Working Papers id:448, eSocialSciences.
    12. Nguyen Khac Minh & Nguyen Viet Hung & Pham Van Khanh & Ha Quynh Hoa, 2014. "Do Direct Foreign Investments Increase Efficiency Convergence at Firm Level? The Case of Vietnam, 2000-2011," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(7), pages 109-119, July.
    13. Jaya Prakash Pradhan, 2006. "Quality of Foreign Direct Investment, Knowledge Spillovers and Host Country Productivity: A Framework of Analysis," Working Papers 0611, Institute for Studies in Industrial Development (ISID).
    14. Thanh Tam Nguyen-Huu & Malika Hattab-Christmann & Med Kechidi, 2010. "Les Effets Des Investissements Directs Étrangers De Plateforme D'Exportation Sur Les Industries Locales Au Vietnam : Effet De Concurrence Et Retombées Technologiques," Post-Print hal-04248282, HAL.
    15. Akinori Tomohara & Kazuhiko Yokota, 2013. "Who Gains from Foreign Direct Investment-Induced Technology Spillovers? Horizontal and Vertical Linkages," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(3), pages 312-324, September.
    16. Didenko Alexander & Egorova Tatiana, 2014. "Innovations as factor of absorptive capacity of fdi spillovers across regions of Russian Federation," Review of Business and Economics Studies, CyberLeninka;Федеральное государственное образовательное бюджетное учреждение высшего профессионального образования «Финансовый университет при Правительстве Российской Федерации» (Финансовый университет), issue 3, pages 75-85.
    17. Santos, Eleonora, 2017. "Externalities from FDI on domestic firms’ Productivity: A Literature Review for Developed Countries," MPRA Paper 88958, University Library of Munich, Germany.
    18. Blomström, Magnus & Kokko, Ari, 2003. "The Economics of Foreign Direct Investment Incentives," EIJS Working Paper Series 168, Stockholm School of Economics, The European Institute of Japanese Studies.
    19. Huu Thanh Tam Nguyen & Manh Hung Nguyen & Aditya Goenka, 2013. "How does FDI affect corporate tax revenue of the host country?," Documents de recherche 13-03, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    20. Hausmann, Ricardo & Hidalgo, Cesar A & Bahar, Dany, 2012. "International Knowledge Diffusion and the Comparative Advantage of Nations," Scholarly Articles 8830781, Harvard Kennedy School of Government.

    More about this item

    Keywords

    foreign direct investment; determinants; South East Europe; role of institutions; financial sector; privatization.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:beo:journl:v:55:y:2010:i:187:p:7-30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Goran Petrić (email available below). General contact details of provider: https://edirc.repec.org/data/efbeoyu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.