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Attracting foreign investment in the Western Balkan region and state aid: Race to the bottom or necessity?

Author

Listed:
  • Kovachev, Goran
  • Velkovska, Ivana
  • Garvanlieva Andonova, Vesna
  • Nikolov, Marjan

Abstract

The aim of this study is to review the current situation regarding the development of state aid policies in countries in the region in the context of attracting foreign investment and to identify possible implications for the regional economies from incentive-based policies. The study provides an overview of the placement and status of state aid to support foreign investment in countries in the region to understand the place and importance in the context of building a functioning market economy according to EU standards and highlighting both shortcomings and opportunities through such policies. This study also seeks to establish a link between the inflow of foreign investment and the impact of state aid. The study provides an overview, conclusions, and recommendations for progress in this area, which are addressed to both decision makers and the public.

Suggested Citation

  • Kovachev, Goran & Velkovska, Ivana & Garvanlieva Andonova, Vesna & Nikolov, Marjan, 2020. "Attracting foreign investment in the Western Balkan region and state aid: Race to the bottom or necessity?," MPRA Paper 101715, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:101715
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    References listed on IDEAS

    as
    1. Agnès Bénassy‐Quéré & Maylis Coupet & Thierry Mayer, 2007. "Institutional Determinants of Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 30(5), pages 764-782, May.
    2. repec:ebl:ecbull:v:6:y:2007:i:13:p:1-9 is not listed on IDEAS
    3. Milan Sedmihradsky & Stanislav Klazar, 2002. "Tax Competition for FDI in Central-European Countries," CESifo Working Paper Series 647, CESifo.
    4. Kamal Upadhyaya & Gyan Pradhan & Dharmendra Dhakal & Rabindra Bhandari, 2007. "Foreign Aid, FDI and Economic Growth in East European Countries," Economics Bulletin, AccessEcon, vol. 6(13), pages 1-9.
    5. Jože Mencinger, 2003. "Does Foreign Direct Investment Always Enhance Economic Growth?," Kyklos, Wiley Blackwell, vol. 56(4), pages 491-508, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Western Balkans; state aid; foreign direct investment; FDI;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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