FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH OF THE CENTRAL AND SOUTHEAST EUROPEAN COUNTRIES
Journal Title: Acta Economica - Year 2017, Vol 15, Issue 27
Abstract
Economic theory suggests that free capital flows increase the efficiency of the resource allocation and stimulate economic growth. Foreign direct investment (FDI) is seen as a remedy for all economic problems in countries that do not have a sufficient level of accumulation to start economic growth. According to economic criteria of Copenhagen, countries that are in the process of European integration should have a functioning market economy able to cope with competition and market forces within the European Union. The greatest expectations regarding the development of a competitive economy in the Southeast European (SEE) countries are precisely related to attraction and exploitation of the positive effects of FDI. This paper explores the impact of FDI on economic growth of the Central European (CE) countries and the SEE countries. The experience of the CE countries can be beneficial for the SEE countries following them in the process of European integration. The results show that FDI flows to the SEE region are significantly lower than to the CE region. Panel analysis has shown a statistically significant impact of FDI on economic growth in both regions. However, in absolute terms the impact of FDI on economic growth in the SEE region is almost negligible.
Authors and Affiliations
Vasilj Žarković, Dragan Gligorić, Nikola Žarković
Keywords
Related Articles
- EP ID EP43852
- DOI https://doi.org/10.7251/ACE1727027Z
- Views 235
- Downloads 0
Managing Public Finance as an Economic Policy Instrument
Under the conditions of imperfect market, the role of the state in economic development of a country is unavoidable. In this process, the state uses various instruments and applies various measures. Fiscal policy, i.e. p...
CONVERGENCE THEORY AND THE POSSIBILITY OF A "THIRD WAY"
The twentieth century is characterized by competition between two economic and political systems: the capitalist and socialist. It is not difficult to conclude that both systems have as their good, and bad sides. In the...
The Internal Interpreneurship and Enterpreneurial Intelligence in TNC
The globalization process of the world economy has created changes in terms of principles and standards of the international corporative interpreneurship. The beares of international corporative interpreneurship are main...
IS THERE HOPE FOR MANAGERIAL CAPITALISM
In the time of turbulence, fast changes and globalization of business, leadership are becoming increasingly important in creation and keeping organization’s competitive advantage. On the basis, this paper deals with prob...
FORENSIC ACCOUNTING AS SOLUTION ON ECONOMICS CRISIS OF FRAUD
What have the contemporary accountants with a temporary financial and economic crisis? Is it possible that absence of effective legal, professional and ethical rules caused our economic crisis? We may ask if we have enou...