FDI Determinants, Incentive Policies and FDI Effects in the Western Balkan Countries
Date Issued
2018
Author(s)
DOI
doi.org/10.1007/978-3-319-67916-7
Abstract
Foreign direct investment (FDI) is one of the least understood concepts
in international economics. Their main proponents argued that FDI is a long-term
and stable cross-border flow of capital that enhances productive capacity of domestic
economies and helps them to meet their balance-of-payments shortfalls. Moreover,
FDI supports transfers technology and management skills and links domestic
economies with the wider global markets. But, in reality, the effects from FDI for
the host countries are very ambiguous. There are number of debates among scholars
and policy makers regarding its nature and impact on capital accumulation, technological
progress, industrialization, growth and development in the host countries.
However, in the last two decades, FDI has increasingly been viewed by policy
makers in the Western Balkan countries (WBCs) as one of the most important
external sources to finance development, increase productivity and import new
technologies. This has been accompanied by an increase in competition among
the WBCs to attract FDI, resulting in higher investment incentives offered by the
host governments. So, for policy makers one of the most important issues is being
able to determine which factors are crucial in driving FDI inflows and what the real
effects of these policies are. Thus, the main focus of this paper is to address these
questions.
in international economics. Their main proponents argued that FDI is a long-term
and stable cross-border flow of capital that enhances productive capacity of domestic
economies and helps them to meet their balance-of-payments shortfalls. Moreover,
FDI supports transfers technology and management skills and links domestic
economies with the wider global markets. But, in reality, the effects from FDI for
the host countries are very ambiguous. There are number of debates among scholars
and policy makers regarding its nature and impact on capital accumulation, technological
progress, industrialization, growth and development in the host countries.
However, in the last two decades, FDI has increasingly been viewed by policy
makers in the Western Balkan countries (WBCs) as one of the most important
external sources to finance development, increase productivity and import new
technologies. This has been accompanied by an increase in competition among
the WBCs to attract FDI, resulting in higher investment incentives offered by the
host governments. So, for policy makers one of the most important issues is being
able to determine which factors are crucial in driving FDI inflows and what the real
effects of these policies are. Thus, the main focus of this paper is to address these
questions.
Subjects
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