IDEAS home Printed from https://ideas.repec.org/a/iez/survey/ces-v21_2-2019_bartlett-krasniqi-ahmetbasic.html
   My bibliography  Save this article

Attracting FDI to the Western Balkans: Special Economic Zones and Smart Specialisation Strategies

Author

Listed:
  • Will Bartlett

    (London School of Economics and Political Science, UK)

  • Besnik Krasniqi

    (University of Prishtina, Kosovo)

  • Jasmina Ahmetbasic

    (Sarajevo School of Science and Technology, Bosnia and Herzegovina)

Abstract

This paper investigates the role of Special Economic Zones (SEZs) in the Western Balkans in supporting industrial policy for economic development. It shows that Serbia and North Macedonia have both implemented policies to establish networks of SEZs that have attracted a relatively large amount of new foreign direct investment, mainly into the motorcar and components industries. Although many jobs have been created and some improvements in export competitiveness have occurred, there is no evidence of improvements in labour productivity or widespread technology spill-over to local economies. The import intensity of production is extremely high, implying little linkage to local economies. The qualitative interviews further reveal limited linkages between SEZ-based companies and local businesses, limited technology transfer, and a lack of appropriate skills among the workforce. In particular, there is insufficient capacity in the motorcar components supply chain. The paper concludes that governments have used SEZ policies as an alternative to regional and local development policies based on smart specialisation. In order to take advantage of the opportunity offered by SEZs, governments in the region should put more effort into developing local supply chains, aligning their policies towards SEZs and smart specialisation in order to leverage the advantages of an increased inflow of direct foreign investment for sustainable economic development in the future.

Suggested Citation

  • Will Bartlett & Besnik Krasniqi & Jasmina Ahmetbasic, 2019. "Attracting FDI to the Western Balkans: Special Economic Zones and Smart Specialisation Strategies," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 21(2), pages 5-35, December.
  • Handle: RePEc:iez:survey:ces-v21_2-2019_bartlett-krasniqi-ahmetbasic
    as

    Download full text from publisher

    File URL: https://hrcak.srce.hr/file/332986
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Wang, Jin, 2013. "The economic impact of Special Economic Zones: Evidence from Chinese municipalities," Journal of Development Economics, Elsevier, vol. 101(C), pages 133-147.
    2. International Monetary Fund, 2015. "Former Yugoslav Republic of Macedonia: Fourth Post-Program Monitoring Discussions," IMF Staff Country Reports 2015/018, International Monetary Fund.
    3. Slavo Radosevic & Katerina Ciampi Stancova, 2018. "Internationalising Smart Specialisation: Assessment and Issues in the Case of EU New Member States," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(1), pages 263-293, March.
    4. International Monetary Fund, 2015. "Former Yugoslav Republic of Macedonia: Selected Issues," IMF Staff Country Reports 2015/243, International Monetary Fund.
    5. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
    6. Bojan Shimbov & Maite Alguacil & Celestino Suárez, 2016. "International Production Networks and Economic Growth: The Case of the Western Balkan Countries," Eastern European Economics, Taylor & Francis Journals, vol. 54(1), pages 49-70, January.
    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. 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.
    2. Branimir Jovanović & Nina Vujanović, 2023. "Towards Effective Industrial Policy in the Western Balkans," wiiw Policy Notes 66, The Vienna Institute for International Economic Studies, wiiw.
    3. Nebojša Stojčić & Korneliusz Pylak & Dubravka Jurlina Alibegović, 2022. "The spatial impact of entrepreneurial zones: firm, city and inter-city evidence," Regional Studies, Taylor & Francis Journals, vol. 56(12), pages 2164-2176, December.

    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. Jan Drahokoupil & Brian Fabo, 2022. "The limits of foreign-led growth: Demand for skills by foreign and domestic firms," Review of International Political Economy, Taylor & Francis Journals, vol. 29(1), pages 152-174, January.
    2. Qiangmin, XI & Peng, JI, 2023. "Does the development zone promote population urbanization? Evidence from China," Land Use Policy, Elsevier, vol. 131(C).
    3. Kevin X. D. Huang & Zheng Liu, 2004. "Multiple stages of processing and the quantity anomaly in international business cycle models," Working Papers 04-8, Federal Reserve Bank of Philadelphia.
    4. Saygılı, Hülya, 2017. "Production fragmentation and factor price convergence," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 535-544.
    5. Rodrigo Mesa-Arango & Badri Narayanan & Satish V. Ukkusuri, 2019. "The Impact of International Crises on Maritime Transportation Based Global Value Chains," Networks and Spatial Economics, Springer, vol. 19(2), pages 381-408, June.
    6. Jarreau, Joachim & Poncet, Sandra, 2012. "Export sophistication and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 97(2), pages 281-292.
    7. Laiqun Jin & Xiuyan Liu & Sam Hak Kan Tang, 2021. "High-Technology Zones, Misallocation of Resources among Cities and Aggregate Productivity: Evidence from China," Economics Discussion / Working Papers 21-11, The University of Western Australia, Department of Economics.
    8. -, 2016. "The South American input-output table: Key assumptions and methodological considerations," Documentos de Proyectos 40832, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Deborah L. Swenson, 2007. "Competition and the location of overseas assembly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 40(1), pages 155-175, February.
    10. Andrei A Levchenko & Jing Zhang, 2013. "The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 479-519, August.
    11. Dermot Leahy & Catia Montagna, 2006. "'Make-or-Buy' in International Oligopoly and the Role of Competitive Pressure," Dundee Discussion Papers in Economics 197, Economic Studies, University of Dundee.
    12. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2020. "Wage response to global production links: evidence for workers from 28 European countries (2005–2014)," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 769-801, November.
    13. Kopczewska Katarzyna, 2019. "Can public intervention improve local public sector economic performance? The analysis of Special Economic Zones in Poland," Central European Economic Journal, Sciendo, vol. 6(53), pages 221-245, January.
    14. Yan, Bingqian & Xia, Yan & Jiang, Xuemei, 2023. "Carbon productivity and value-added generations: Regional heterogeneity along global value chain," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 111-125.
    15. Picarelli, Nathalie, 2016. "Who really benefits from export processing zones? Evidence from Nicaraguan municipalities," Labour Economics, Elsevier, vol. 41(C), pages 318-332.
    16. Marcel Fratzscher & Arnaud Mehl, 2014. "China's Dominance Hypothesis and the Emergence of a Tri‐polar Global Currency System," Economic Journal, Royal Economic Society, vol. 124(581), pages 1343-1370, December.
    17. Fan, Jianyong & Liu, Yu & Zhang, Qi & Zhao, Peng, 2022. "Does government debt impede firm innovation? Evidence from the rise of LGFVs in China," Journal of Banking & Finance, Elsevier, vol. 138(C).
    18. Jin, Laiqun & Dai, Jiaying & Jiang, Weijie & Cao, Kairui, 2023. "Digital finance and misallocation of resources among firms: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).
    19. Pol Antràs & Elhanan Helpman, 2006. "Contractual Frictions and Global Sourcing," NBER Working Papers 12747, National Bureau of Economic Research, Inc.
    20. Benno Ferrarini, 2013. "Vertical Trade Maps," Asian Economic Journal, East Asian Economic Association, vol. 27(2), pages 105-123, June.

    More about this item

    Keywords

    special economic zones; smart specialisation; technology transfer; skills; supply chains;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    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:iez:survey:ces-v21_2-2019_bartlett-krasniqi-ahmetbasic. 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: Doris Banicevic (email available below). General contact details of provider: https://edirc.repec.org/data/eizgghr.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.