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Foreign Direct Investment in Selected Countries of Balkan: Does it Crowd out or Crowd in Domestic Investment?
[Priame zahraničné investície vo vybraných krajinách Balkánu: vťahujú alebo vytláčajú domáce investície]

Author

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  • Zuzana Gallová

Abstract

Foreign direct investments are generally considered as one of the factors with positive influence on the economic development of countries in which this investments flow. In evaluating the impact of foreign direct investment on development, however, a key question is whether foreign direct investment crowd in domestic investment, or foreign direct investment crowd out domestic investment. The aim of this paper is to examine whether foreign direct investment in selected countries of Balkan crowds in or crowds out domestic investment. For this purpose we apply theoretical model of investment that includes foreign direct investment as an exogenous variable. We proceed test it with panel data for the period 1993 - 2009 and the two subperiods 1993 - 1999 and 2000 - 2009. We found that for the time period 1993 - 2009 and the two subperiods 1993 - 1999 and 2000 - 2009 there was an evidence of crowding out effect or neutral effect in the selected countries of Balkan.

Suggested Citation

  • Zuzana Gallová, 2011. "Foreign Direct Investment in Selected Countries of Balkan: Does it Crowd out or Crowd in Domestic Investment? [Priame zahraničné investície vo vybraných krajinách Balkánu: vťahujú alebo vytláčajú d," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2011(4), pages 68-78.
    • Handle: RePEc:prg:jnlcfu:v:2011:y:2011:i:4:id:151:p:68-78
    DOI: 10.18267/j.cfuc.151
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    References listed on IDEAS

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    1. V.N. Balasubramanyam, 2008. "Foreign Direct Investment," Chapters, in: Amitava Krishna Dutt & Jaime Ros (ed.), International Handbook of Development Economics, Volumes 1 & 2, volume 0, chapter 39, Edward Elgar Publishing.
    2. Manuel Agosin & Roberto Machado, 2005. "Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment?," Oxford Development Studies, Taylor & Francis Journals, vol. 33(2), pages 149-162.
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    Cited by:

    1. Justice Gameli Djokoto, 2021. "Foreign direct investment into agriculture: does it crowd-out domestic investment?," Agrekon, Taylor & Francis Journals, vol. 60(2), pages 176-191, April.

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    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
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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