Empirical research of foreign direct investment determinants in developing countries: A case study of the Western Balkan countries

• Main Authors: Papović Zoran, Dević Željko, Radivojević Nikola
• Format: Article
• Language: English
• Published: Association of Serbian Banks 2020-01-01
• Series: Bankarstvo
• Subjects: foreign direct investments; socio-political instability; developing countries; panel analysis
• Online Access: https://scindeks-clanci.ceon.rs/data/pdf/1451-4354/2020/1451-43542004042P.pdf

This paper presents the results of an original empirical research of the effects and the importance of foreign direct investments on the economic development of developing countries, as well as the determinants of attracting them, with particular reference to European developing countries, which was conducted using panel data through an example of selected Western Balkan countries: Serbia, Montenegro, Bosnia and Herzegovina and Macedonia. The research was conducted during the period from 2000 to 2017. The research results show that there is no statistically significant connection between political risk indices, GDP and unemployment rates and technology transfers, on the one hand, and FDI inflow rates, on the other. The results of the analysis reveal that the FDI rate is inversely proportional to the inflation rate in the host country.