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Are Foreign Direct Investment Contribution to The Economic Growth of Transition?

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  • Nestorović Olgica

    (PhD student, University of Kragujevac, Faculty of Economics, Serbia)

Abstract

The main aim of this paper is to show whether foreign direct investments affect the development of transition countries. This paper represents an empirical model where you analyze sixteen countries in transition in the 10-year period. The existence of a positive correlation between the level of incoming foreign direct investments and economic characteristics of the economy, as well as its competitiveness, is obvious in numerous studies that have studied this subject, but there are also some opposite standpoints. The increase of foreign direct investments in host country by itself does not imply a positive impact on economic growth, but it depends on numerous factors such as human capital, financial structure development, macroeconomic stability and other institutional factors.

Suggested Citation

  • Nestorović Olgica, 2015. "Are Foreign Direct Investment Contribution to The Economic Growth of Transition?," Economic Themes, Sciendo, vol. 53(2), pages 267-277, June.
    • Handle: RePEc:vrs:ecothe:v:53:y:2015:i:2:p:267-277:n:7
    DOI: 10.1515/ethemes-2015-0015
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    References listed on IDEAS

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    1. Laura Alfaro & Andrew Charlton, 2013. "Growth and the Quality of Foreign Direct Investment," International Economic Association Series, in: Joseph E. Stiglitz & Justin Yifu Lin (ed.), The Industrial Policy Revolution I, chapter 3, pages 162-204, Palgrave Macmillan.
    2. Alfaro, Laura & Charlton, Andrew, 2007. "Growth and the quality of foreign direct investment: is all FDI equal?," LSE Research Online Documents on Economics 19666, London School of Economics and Political Science, LSE Library.
    3. 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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