Motives for Foreign Direct Investment in the Manufacturing Sector in FYR Macedonia

Aristidis Bitzenis, John Marangos and Valentina Nuskova

Post-Communist Economies, 2007, vol. 19, issue 4, 505-527

Abstract: The aim of this article is to provide clear insight into the key FDI motives in the manufacturing sector in FYR Macedonia and suggest recommendations that might be applied in attracting FDI. Based on questionnaire data on 79 manufacturing companies, the manufacturing sector was found to perceive the low cost of unskilled labour as the strongest FDI driving force, followed by ownership advantages and geographical proximity. Contrary to the prevailing consensus in the literature, market factors seem to exert very limited influence in attracting investment, except for investment targeting the local market. One major lesson that can be drawn is that generalised investment promotion policies and strategies might not work equally well for all manufacturing industries and might have no impact in attracting FDI in particular cases. Instead, policies should employ a tailor-made approach, taking account of specific features of the targeted industries, companies and countries of origin.

Date: 2007
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DOI: 10.1080/14631370701680337

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