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Foreign Direct Investment in the Western Balkans: What Role Has it Played During Transition?

Author

Listed:
  • Saul Estrin

    (Department of Management, London School of Economics)

  • Milica Uvalic

    () (Department of Economics, University of Perugia)

Abstract

Abstract The paper explores the impact of foreign direct investment (FDI) on the economies of the Western Balkans during their transition to a market system. The paper recalls the political and historical circumstances that have delayed transition in the Western Balkans economies, and draws attention to the specific features of FDI that have influenced their economic development. The main hypotheses are formulated and basic tests performed on data from the manufacturing sector. However, data limitations mean that we can only test for horizontal, rather than vertical, spillovers and in practice we are not able to identify many significant horizontal spillover effects. This finding can probably be explained by various factors – institutional, economic and political – that have constrained FDI effects in the Western Balkan economies in comparison with the Central East European countries. Our work has important policy implications; in order to accelerate economic development, Western Balkan policymakers may need to implement more effective economic policies.

Suggested Citation

  • Saul Estrin & Milica Uvalic, 2016. "Foreign Direct Investment in the Western Balkans: What Role Has it Played During Transition?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(3), pages 455-483, September.
  • Handle: RePEc:pal:compes:v:58:y:2016:i:3:d:10.1057_ces.2016.10
    DOI: 10.1057/ces.2016.10
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    References listed on IDEAS

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    Cited by:

    1. repec:beo:journl:v:62:y:2017:i:215:p:7-52 is not listed on IDEAS
    2. Nebojsa Stojcic & Zoran Aralica, 2017. "Choosing Right from Wrong: Industrial Policy and (De)industrialization in Central and Eastern Europe," Working Papers 1703, The Institute of Economics, Zagreb.
    3. repec:ipf:psejou:v:41:y:2017:i:4:p:421-441 is not listed on IDEAS

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