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Trends of international portfolio investment flows in EU member states from Southеast Europe: To where does the money flow?

Author

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  • Petranov, Stefan
  • Zlatinov, Dimitar

Abstract

In the present article, we study a trend that has been observed in recent years - financial resources that could be invested in the development of “catching up” EU Member States in Southeast Europe (SEE) are invested abroad, and support already developed economies, particularly in the euro area. We find that such a trend is likely to continue in the short to medium run due to weaknesses in the business environment and underdevelopment of local capital markets in Bulgaria, Croatia, Cyprus, Greece, and Romania. Therefore, we study the subsequent effects on these economies and how the functioning of the Capital Markets Union (CMU) could moderate this trend. We conclude that the CMU initiatives have eased access to market-based financing and have widened the scope for entrepreneurship. However, these opportunities have so far been exploited to a minimal extent in the SEE region.

Suggested Citation

  • Petranov, Stefan & Zlatinov, Dimitar, 2023. "Trends of international portfolio investment flows in EU member states from Southеast Europe: To where does the money flow?," MPRA Paper 123631, University Library of Munich, Germany, revised 2023.
    • Handle: RePEc:pra:mprapa:123631
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    File URL: https://mpra.ub.uni-muenchen.de/123631/4/MPRA_paper_123631.pdf
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    More about this item

    Keywords

    financial markets; portfolio investment; capital flows; SEE countries; Capital Markets Union;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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