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Attraction of Foreign Direct Investments as a Challenge in Accession Process to European Union

Author

Listed:
  • Stanisic, Nenad
  • Jankovic, Nenad

Abstract

When we speak about the significance of foreign direct investments (FDI) for the transition economies of Southeastern Europe, we mainly think of two important effects of FDI: effect on economic growth and effect on export performances. Both economic features (growth and export performance) are important for the transition economies in sense of European Union (EU) accession prospect. The experience of Central European countries, now members of European Union, shows that FDI inflows from EU countries were indicator of country’s reform progress. After short review of relevant researches, we analyzed the statistical relationship between FDI inflow and economic growth. Results don’t reveal any positive correlation between these two variables. However, FDI play important role in technology transfer and improve technological development level in transition economies. On the other hand, our research shows that FDI are correlated with improving of export’s structure of transition countries. FDI inflows in Central European countries were followed by changes of factorial intensity of export goods, as by sectoral structure of export, in positive manner. Compared with Central European transition countries, region of Southeastern Europe has less success in attracting FDI, which consequently results in weaker economic and export performances. FDI have an important role in export’s structure convergence between EU and transition countries.

Suggested Citation

  • Stanisic, Nenad & Jankovic, Nenad, 2006. "Attraction of Foreign Direct Investments as a Challenge in Accession Process to European Union," MPRA Paper 4844, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:4844
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    File URL: https://mpra.ub.uni-muenchen.de/4844/1/MPRA_paper_4844.pdf
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    References listed on IDEAS

    as
    1. Campos, Nauro F & Kinoshita, Yuko, 2002. "Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies," Manchester School, University of Manchester, vol. 70(3), pages 398-419, June.
    2. Aturupane, Chonira & Djankov, Simeon & Hoekman, Bernard, 1997. "Determinants of intra-industry trade between East and West Europe," Policy Research Working Paper Series 1850, The World Bank.
    3. Djankov, Simeon & Hoekman, Bernard M, 2000. "Foreign Investment and Productivity Growth in Czech Enterprises," World Bank Economic Review, World Bank Group, vol. 14(1), pages 49-64, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    foreign direct investments; economic growth; export performance; transition economies;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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