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The role of Italian FDI in Southeast Europe's international integration. A focus on investors from the Marche region

Author

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  • Eleonora Cutrini
  • Francesca Spigarelli

Abstract

Southeast European countries have experienced significant economic integration into the world economy since 2000, through international capital flows and especially foreign direct investment (FDI). The work sheds light on recent trends in Italy-Western Balkans economic integration through FDI and other non-equity modes (NEMs). The methodology applied is based on country-level analysis, enriched by a case study approach. Main trends, characteristics and motivation of investments in the area are investigated. Based on this evidence, we suggest that the phenomenon of Italian integration in the Western Balkans is broader than official statistics would indicate, since Italian firms often set up subsidiaries through various non-equity arrangements. The surge in FDI in the area is recent, therefore it is not surprising that the main determinants are cost reductions and new market opportunities. What is interesting in this context is that local entrepreneurs regard efficiency-seeking investments as profitable only if they are connected to market-seeking goals. We find evidence also of localized industrial development stimulated by the entry of Italian firms, which is activating subcontracting relationships with existing companies in the host region. Further and in depth studies are needed to investigate the phenomenon.

Suggested Citation

  • Eleonora Cutrini & Francesca Spigarelli, 2012. "The role of Italian FDI in Southeast Europe's international integration. A focus on investors from the Marche region," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 9(3), pages 395-424, December.
  • Handle: RePEc:liu:liucej:v:9:y:2012:i:3:p:395-424
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    Keywords

    FDI; Southeast Europe; case study;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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