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Effects of Foreign Direct Investments on Serbian Exporters′ Profitability

Author

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  • Domanović Violeta

    (University of Kragujevac, Faculty of Economics, Serbia)

  • Jovanović Sandra Stojadinović

    (University of Belgrade, Faculty of Economics, Serbia)

Abstract

For Serbia the efforts to attract investments from abroad came to the fore with the beginning of transition process. The process of ownership transformation in Serbia most often implied foreign direct investment inflows, because it included participation of foreign investors in purchase of domestic companies that had been the subject of privatisation. The subject of research in the paper is Serbian experience in attracting foreign capital into local export companies with special emphasis on their profitability. Aim of the paper is to estimate the profitability of leading Serbian exporters financed by foreign direct investments, i.e. to determine whether and to what extent foreign direct investments contributed to the increase of return on assets (ROA) and return on equity (ROE), as basic profitability measures. The results show that, in the case of Serbian exporters, the profitability varies, both per companies and per individual years. There is no general conclusion that foreign direct investments contributed to the ROA increase. On the contrary, ROA values significantly varied during this period. Either enormous increase or enormous decrease could be observed. The same goes for ROE values.

Suggested Citation

  • Domanović Violeta & Jovanović Sandra Stojadinović, 2017. "Effects of Foreign Direct Investments on Serbian Exporters′ Profitability," Economic Themes, Sciendo, vol. 55(1), pages 1-23, March.
    • Handle: RePEc:vrs:ecothe:v:55:y:2017:i:1:p:1-23:n:1
    DOI: 10.1515/ethemes-2017-0001
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    References listed on IDEAS

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