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Importance and Impact of Foreign Investment on the Economic Development of Bosnia and Herzegovina

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  • Šušićv Milan

    (University of Business Studies Banja Luka, Faculty of Business and Financial Studies, Bosnia and Herzegovina)

Abstract

From the perspective of macroeconomic indicators, investment is a significant determinant of economic development as a whole, as well as the development of economic entities in the micro segment. Investments present an essential element of any economic policy, as their presence provides a platform, not only for economic development, but also create a basic condition for the stability of economic and social trends. Foreign direct investment plays an important role in the financing of the global economy, and the most common presenting the most important tool in financing the national economies of developing countries and countries in transition. Demand for foreign investment in the global market is large and therefore the states are directing significant activities in order to create a more favorable environment to attract investors. The paper pays special attention to direct investmens in financing the economy on a global scale, their importance for the development of the global economy and particulary screens the impact of foreign direct investment in the economic development of Bosnia and Herzegovina. The emphasis is placed on activities that have to be carried out in order to realize more investments. With the use of statistical and quantitative analysis, the paper shows that the inflow of foreign capital is fundamental prerequisite for generating and accelarating of economic development in general. The inflow of foreign capital has an exstraodinary positive impact on the economic development and increase of business activities in visably undeveloped and slow economic in Bosnia and Herzegovina.

Suggested Citation

  • Šušićv Milan, 2018. "Importance and Impact of Foreign Investment on the Economic Development of Bosnia and Herzegovina," Economics, Sciendo, vol. 6(1), pages 63-80, June.
    • Handle: RePEc:vrs:econom:v:6:y:2018:i:1:p:63-80:n:7
    DOI: 10.2478/eoik-2018-0007
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    References listed on IDEAS

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    1. Mehmet Demirbag & Ekrem Tatoglu & Keith W. Glaister, 2008. "Factors affecting perceptions of the choice between acquisition and greenfield entry: The case of Western FDI in an emerging market," Management International Review, Springer, vol. 48(1), pages 5-38, February.
    2. Jože Mencinger, 2003. "Does Foreign Direct Investment Always Enhance Economic Growth?," Kyklos, Wiley Blackwell, vol. 56(4), pages 491-508, November.
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