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FDI, trade and integration in the Western Balkan Countries: Is there any causality?

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  • Ines Kersan-Skabic

Abstract

The aim is to determine whether there is a correlation between trade and investment flows and their inter-causality on a group of Western Balkan countries (Croatia, Bosnia and Herzegovina, FYRoM and Serbia). The analysis in static model resulted in establishing complementarities between FDI inflows and exports and FDI inflows and imports into the countries of the region, which indicates that FDI inflows in this region are efficiency-seeking. Dynamic models have confirmed the traditional variables important for exports and imports (GDP host and home countries, distance, and lagged variables), but there were no links between trade and FDI. The relationship and intensity between trade and FDI is very weak which indicates that the current structure of FDI has not given the desired results in these countries.

Suggested Citation

  • Ines Kersan-Skabic, 2011. "FDI, trade and integration in the Western Balkan Countries: Is there any causality?," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 4(4), pages 420-436.
    • Handle: RePEc:ids:ijtrgm:v:4:y:2011:i:4:p:420-436
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