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Explanatory Variables for Low Western Investment Interest in Bulgaria

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  • ARISTIDIS BITZENIS

Abstract

The understanding of a country's past is important in the process of analyzing a country's present. Through the study of Bulgarian history, the researcher developed a relatively good understanding of the country's image at the beginning of the period in question (1989-2002). The evidence supports the unexpected finding that historical links do not affect a company's decision to invest in another country. Furthermore, there is support for the conclusion that political unwillingness to make significant reforms together with the inefficiency of the post-communist Bulgarian government rather than Bulgarian political instability led to delays in structural reform and delayed progress in privatization, limited foreign direct investment (FDI) inflows, and thus to a delay in the overall Bulgarian transition process. Moreover, the cultural closeness and/or distance of multinational enterprises' (MNEs') countries of origin vis-à-vis the host country remain questionable, and they have been used either as incentives or as obstacles to MNEs' investment decisions depending on the specific industries and on the specific products. On the other hand, the geographical distance of Bulgaria from advanced Western countries is an important barrier that partially explains low Western investment interest in Bulgaria.

Suggested Citation

  • Aristidis Bitzenis, 2004. "Explanatory Variables for Low Western Investment Interest in Bulgaria," Eastern European Economics, Taylor & Francis Journals, vol. 42(6), pages 5-38, November.
  • Handle: RePEc:mes:eaeuec:v:42:y:2004:i:6:p:5-38
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    Cited by:

    1. Arslan, Ahmad & Tarba, Shlomo Y. & Larimo, Jorma, 2015. "FDI entry strategies and the impacts of economic freedom distance: Evidence from Nordic FDIs in transitional periphery of CIS and SEE," International Business Review, Elsevier, vol. 24(6), pages 997-1008.
    2. Carlos Roberto Azzoni & Aquiles Kalatzis, 2006. "Regional Differences in the Determinants of Investment Decisions of Private Firms in Brazil," ERSA conference papers ersa06p161, European Regional Science Association.
    3. Eleftheria Koniari, 2016. "Determinants Of Greek Fdi Outflows In The Balkan Region The Case Of Greek Entrepreneurs In Bulgaria," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 12(1), pages 33-44.
    4. Peter Kuot Madit Chol, 2020. "The Location Determinants of FDI in Sudan. Time Series – Empirical Analysis From 1980-2018," International Journal of Science and Business, IJSAB International, vol. 4(7), pages 26-45.
    5. Joel I. Deichmann & Stephen Grubaugh & Patrick Scholten, 2022. "FDI propensity and geo-cultural interaction in former Yugoslavia: pairwise analysis of origin and destination countries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 479-505, September.

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