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The Impact Analysis of Foreign Direct Investment on Export: The Case of the Western Balkan Countries

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  • Savićević Marko

    (University of Kragujevac, Faculty of Economics, Republic of Serbia)

  • Kostić Milan

    (University of Kragujevac, Faculty of Economics, Republic of Serbia)

Abstract

In order to improve the competitive position and ensure continuous and sustainable economic growth in the international market, Western Balkan countries have recognized export sectors and branches as success generators. However, the low accumulation of economies in the region and insufficient export orientation have led to a major reliance on foreign direct investment (hereinafter: FDI), which have become the drivers of the economic growth of some sectors. The aim of this research is to evaluate the impact of FDI inflows on export trends in the Western Balkan countries, as well as in some Central and Eastern European countries, that have a similar political and economic history as the Western Balkan countries. These countries were used as a basis for comparing and interpreting results related to the Western Balkan countries. Panel regression with fixed-effects is a method that was applied in attempt to determine the real impact of FDI on export. The research that has been conveyed shows that there is a statistically significant positive effect of FDI on the growth of the Western Balkan countries export. Anyway, the model describes only a small impact on the export, which means that the growth of the export should be looking more into some other factors, rather than in the invested capital origin.

Suggested Citation

  • Savićević Marko & Kostić Milan, 2020. "The Impact Analysis of Foreign Direct Investment on Export: The Case of the Western Balkan Countries," Economic Themes, Sciendo, vol. 58(2), pages 171-186, June.
    • Handle: RePEc:vrs:ecothe:v:58:y:2020:i:2:p:171-186:n:2
    DOI: 10.2478/ethemes-2020-0010
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    References listed on IDEAS

    as
    1. Lall, Sanjaya & Narula, Rajneesh, 2004. "FDI and its role in economic development: Do we need a new agenda?," Research Memorandum 019, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    2. Justin Paul & Gurmeet Singh, 2017. "The 45 years of foreign direct investment research: Approaches, advances and analytical areas," The World Economy, Wiley Blackwell, vol. 40(11), pages 2512-2527, November.
    3. Valerija Botrić, 2010. "Foreign Direct Investments In Western Balkans: Privatization, Institutional Change And Banking Sector Dominance," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 55(187), pages 7-31, October –.
    4. repec:wbk:wbpubs:26447 is not listed on IDEAS
    5. Jože Mencinger, 2003. "Does Foreign Direct Investment Always Enhance Economic Growth?," Kyklos, Wiley Blackwell, vol. 56(4), pages 491-508, November.
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    Keywords

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    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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