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Motives for Foreign Direct Investment in the Manufacturing Sector in FYR Macedonia


  • Aristidis Bitzenis
  • John Marangos
  • Valentina Nuskova


The aim of this article is to provide clear insight into the key FDI motives in the manufacturing sector in FYR Macedonia and suggest recommendations that might be applied in attracting FDI. Based on questionnaire data on 79 manufacturing companies, the manufacturing sector was found to perceive the low cost of unskilled labour as the strongest FDI driving force, followed by ownership advantages and geographical proximity. Contrary to the prevailing consensus in the literature, market factors seem to exert very limited influence in attracting investment, except for investment targeting the local market. One major lesson that can be drawn is that generalised investment promotion policies and strategies might not work equally well for all manufacturing industries and might have no impact in attracting FDI in particular cases. Instead, policies should employ a tailor-made approach, taking account of specific features of the targeted industries, companies and countries of origin.

Suggested Citation

  • Aristidis Bitzenis & John Marangos & Valentina Nuskova, 2007. "Motives for Foreign Direct Investment in the Manufacturing Sector in FYR Macedonia," Post-Communist Economies, Taylor & Francis Journals, vol. 19(4), pages 505-527.
  • Handle: RePEc:taf:pocoec:v:19:y:2007:i:4:p:505-527 DOI: 10.1080/14631370701680337

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    References listed on IDEAS

    1. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    2. Böhringer, Christoph & Rutherford, Thomas Fox & Wiegard, Wolfgang, 2003. "Computable general equilibrium analysis: Opening a black box," ZEW Discussion Papers 03-56, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November.
    4. Miroslav VerbiÄ & Boris Majcen & Renger Van Nieuwkoop, 2006. "Sustainability of the Slovenian Pension System: An Analysis with an Overlapping-Generations General Equilibrium Model," Eastern European Economics, Taylor & Francis Journals, vol. 44(4), pages 60-81, August.
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