Foreign direct investment in the Western Balkans: what role has it played during transition?

Saul Estrin and Milica Uvalic

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The paper explores the impact of foreign direct investment (FDI) on the economies of the Western Balkans during their transition to a market system. The paper recalls the political and historical circumstances that have delayed transition in the Western Balkans economies, and draws attention to the specific features of FDI that have influenced their economic development. The main hypotheses are formulated and basic tests performed on data from the manufacturing sector. However, data limitations mean that we can only test for horizontal, rather than vertical, spillovers and in practice we are not able to identify many significant horizontal spillover effects. This finding can probably be explained by various factors – institutional, economic and political – that have constrained FDI effects in the Western Balkan economies in comparison with the Central East European countries. Our work has important policy implications; in order to accelerate economic development, Western Balkan policymakers may need to implement more effective economic policies.

Keywords: foreign direct investment; Balkans; transition; spillover effects (search for similar items in EconPapers)
JEL-codes: F23 L53 P33 (search for similar items in EconPapers)
Date: 2016-06-02
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (11)

Published in Comparative Economic Studies, 2, June, 2016, 58(3), pp. 455-483. ISSN: 0888-7233

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:67004

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