Joint Ventures in Yugoslavia: Opportunities and Constraints

Yugoslavia’s post-1965 economic policies have been directed towards opening the economy to foreign trade and encouraging inward investment in Joint Ventures. This research examines the opportunities and constraints facing Western multinational companies which invest in Joint Ventures in Yugoslav industry. The empirical evidence drawn from a sample of 42 West European and North American companies addresses itself to the formation and success of Joint Ventures, the route to foreign direct investment in Yugoslavia and motives and preferences for Joint Ventures to other forms of industrial cooperation. This chapter is based on an empirical study of Western European and North American multinational companies which have invested in Yugoslav industry between 1968 and 1980. The first section examines the advantages and drawbacks of Yugoslavia as a host country for such ventures. The second section analyses the nature and overall pattern of Joint Ventures in Yugoslav industry, and the third section summarises the legal regulations governing such ventures. The fourth section summarises a detailed empirical analysis of 42 Joint Ventures, concentrating on their location decision, the degree of successful operation achieved, the foreign entrant’s pre-Joint Venture dealings with Yugoslavia and the motives behind the decision to implement a Joint Venture.