IDEAS home Printed from https://ideas.repec.org/a/bas/econst/y2009i1p197-213.html
   My bibliography  Save this article

Foreign Direct Investments in Bulgaria: Do They Have an Effect on the Economic Development of the Country?

Author

Listed:
  • Iskra Christova-Balkanska

Abstract

The article is trying to analyze the benefits of attracting foreign direct investments (FDI) and the supposed effect on the economic development in Bulgaria. The increase of FDI per capita is important for the penetration and absorption of FDI in the economy, as well as for the creation of new jobs. FDI’s accumulation demonstrates the relative increase of the absorptive capacity of the Bulgarian economy. The regressive analysis shows that there is a strong connection between the attracted FDI and the increase of GDP. Despite that FDI are increasing in processing industry and financial intermediation, the last years they are directed to the real estate, building and acquiring industrial, logistic and trade projects or to companies with intermediation or leasing activity. Thought the macroeconomic indicators in Bulgaria are relatively stable, the deficit in the current payment balance is deepening and the attraction of FDI is considered as a source for financial assistance. At present, and regardless of the strong relation between FDI and GDP, it is not possible to affirm that the increase of FDI in Bulgaria is contributing to the development of export-oriented economy. The global financial crisis also is creating an unfavorable economic environment, influencing negatively on the inflows of FDI in Bulgaria and on the economic development.

Suggested Citation

  • Iskra Christova-Balkanska, 2009. "Foreign Direct Investments in Bulgaria: Do They Have an Effect on the Economic Development of the Country?," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 197-213.
    • Handle: RePEc:bas:econst:y:2009:i:1:p:197-213
    as

    Download full text from publisher

    File URL: http://www.ceeol.com/aspx/issuedetails.aspx?issueid=e7b4884b-e874-42fe-8103-6743cc5001f2&articleid=dad49ccd-3715-4d22-bb63-cfa117f5625a#adad49ccd-3715-4d22-bb63-cfa117f5625a
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Campos, Nauro F. & Kinoshita, Yuko, 2008. "Foreign Direct Investment and Structural Reforms: Evidence from Eastern Europe and Latin America," IZA Discussion Papers 3332, Institute of Labor Economics (IZA).
    2. Theodore H. Moran & Edward M. Graham & Magnus Blomstrom, 2005. "Does Foreign Direct Investment Promote Development?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 3810, October.
    3. Henrik Hansen & John Rand, 2006. "On the Causal Links Between FDI and Growth in Developing Countries," The World Economy, Wiley Blackwell, vol. 29(1), pages 21-41, January.
    4. Iskra Hristova-Balkanska, 2005. "The Possible Effects of Foreign Direct Investments on the Southeastern European Countries in the Context of the EU Enlargement," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 95-114.
    5. Ms. Elina Ribakova & Mr. Balázs Horváth & Mr. Dimitri G Demekas & Mr. Yi Wu, 2005. "Foreign Direct Investment in Southeastern Europe: How (and How Much) Can Policies Help?," IMF Working Papers 2005/110, International Monetary Fund.
    6. Valerija Botrić & Lorena Škuflić, 2006. "Main Determinants of Foreign Direct Investment in the Southeast European Countries," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 13(2), pages 359-377, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Radovan Kovačević, 2022. "The Effects Of Fdi Net Inflow On The Current Account Of Southeast Europe Countries – A Panel Causality Analysis," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(235), pages 95-122, October –.
    2. Grigor Stoevsky, 2014. "Dependencies between Labour Productivity, Export and FDI in the New EU Member Countries (cointegration analysis at sector and macroeconomic level)," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 15-42.
    3. Grigor Stoevsky, 2015. "Exports and foreign direct investment as factors for economic growth in the EU New Member States," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 92-111,112-.
    4. Temiz, Dilek & Gökmen, Aytaç, 2014. "FDI inflow as an international business operation by MNCs and economic growth: An empirical study on Turkey," International Business Review, Elsevier, vol. 23(1), pages 145-154.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.
    2. Dierk Herzer & Stephan Klasen & Felicitas Nowak-Lehmann D., 2006. "In search of FDI-led growth in developing countries," Ibero America Institute for Econ. Research (IAI) Discussion Papers 150, Ibero-America Institute for Economic Research.
    3. Jiangyan Yu & Mr. James P Walsh, 2010. "Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach," IMF Working Papers 2010/187, International Monetary Fund.
    4. Ines TROJETTE, 2016. "The Effect Of Foreign Direct Investment On Economic Growth: The Institutional Threshold," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 43, pages 111-138.
    5. Alexander Maune, 2018. "The Impact of FDI Inflows, Exports and Domestic Investment on Economic Growth in Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 10(4), pages 152-164.
    6. Md. Shakib Hossain & Md. Shahin Kamal & Md. Rubaeth Halim & Nurul Mohammad Zayed, 2019. "Inward Foreign Direct Investment and Welfare Nexus: The Impact of Foreign Direct Investment on Welfare in Developing Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 9(4), pages 228-240.
    7. Marijana Andrijic & Tajana Barbic, 2018. "Trick or Treat? The Effect of IMF Programmes on Mobilising FDI in CESEE Countries," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 68(3), pages 245-267, July.
    8. World Bank, "undated". "World Bank East Asia and Pacific Economic Update, April 2014 : Preserving Stability and Promoting Growth," World Bank Publications - Reports 18378, The World Bank Group.
    9. Valentin Goev & Venelin Boshnakov & Ekaterina Tosheva, 2011. "Foreign Direct Investments In Bulgaria: Main Results Of Foreign Investors Surveys," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 58, pages 387-410, november.
    10. Beugelsdijk, Sjoerd & Smeets, Roger & Zwinkels, Remco, 2008. "The impact of horizontal and vertical FDI on host's country economic growth," International Business Review, Elsevier, vol. 17(4), pages 452-472, August.
    11. Sasidaran Gopalan & Alice Ouyang & Ramkishen S. Rajan, 2018. "Impact of Greenfield FDI versus M&A on growth and domestic investment in developing Asia," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(1), pages 41-70, April.
    12. International Monetary Fund, 2010. "FDI Flows to Low-Income Countries: Global Drivers and Growth Implications," IMF Working Papers 2010/132, International Monetary Fund.
    13. Hsiao, Frank S.T. & Hsiao, Mei-Chu W., 2006. "FDI, exports, and GDP in East and Southeast Asia--Panel data versus time-series causality analyses," Journal of Asian Economics, Elsevier, vol. 17(6), pages 1082-1106, December.
    14. Ms. Elif C Arbatli Saxegaard, 2011. "Economic Policies and FDI Inflows to Emerging Market Economies," IMF Working Papers 2011/192, International Monetary Fund.
    15. Akisik, Orhan & Gal, Graham & Mangaliso, Mzamo P., 2020. "IFRS, FDI, economic growth and human development: The experience of Anglophone and Francophone African countries," Emerging Markets Review, Elsevier, vol. 45(C).
    16. Eva Rytter Sunesen, 2009. "Examining the Regional Aspect of Foreign Direct Investment to Developing Countries," Discussion Papers 09-02, University of Copenhagen. Department of Economics.
    17. Pitz, Mónika & Balatoni, András, 2012. "A működőtőke hatása a bruttó nemzeti jövedelemre Magyarországon [The effect of direct investment on Hungary s gross national income]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 1-30.
    18. Michal Mádr & Luděk Kouba, 2015. "Does the Political Environment Affect Inflows of Foreign Direct Investment? Evidence from Emerging Markets," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(6), pages 2017-2026.
    19. Oana Cristina POPOVICI & Adrian Cantemir CĂLIN & Diana IVANA & Sorin DAN, 2021. "FDI Determinants Revisited: Extensive Evidence," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 103-123, December.
    20. Yongkul Won & Frank S.T. Hsiao & Doo Yong Yang, 2008. "FDI Inflows, Exports and Economic Growth in First and Second Generation ANIEs : Panel Data Causality Analyses," Trade Working Papers 21939, East Asian Bureau of Economic Research.

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bas:econst:y:2009:i:1:p:197-213. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Diana Dimitrova (email available below). General contact details of provider: https://edirc.repec.org/data/ikbasbg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.