SHS Web of Conf.
Volume 92, 2021The 20th International Scientific Conference Globalization and its Socio-Economic Consequences 2020
|Number of page(s)||14|
|Section||Regions and Economic Resilience|
|Published online||13 January 2021|
The Effects of FDI on Domestic Investments in Western Balkans
1 Chief Executive Officer of Halkbank AD Skopje, Ss. Cyril & Methodius 54, Skopje 1000, Republic of North Macedonia
2 Ss. Cyril and Methodius University in Skopje, Faculty of Economics – Skopje, Blvd. Goce Delchev 9V, 1000 Skopje, Republic of North Macedonia
3 Director of Financial Management, Accounting and Credit Analysis Division of Halkbank AD Skopje, Ss. Cyril & Methodius 54, Skopje 1000, Republic of North Macedonia
* Corresponding author: Borce.Trenovski@eccf.ukim.edu.mk
Research background: In order to contribute to economic growth, inward foreign direct investments (FDI) need to meet certain economic and social criteria. Besides the contribution to the level of education, technological level, financial development, tax system, trade and investment policies, and market size, FDI should also encourage domestic investments (crowding in-effect).
Purpose of the article: This paper examines the importance and effects of the inward and outward direct investments, gross savings as well as real growth on domestic investments in the case of Western Balkan countries (North Macedonia, Serbia, Albania, Kosovo, Montenegro, and Bosnia & Herzegovina). Thus, the logic behind this research is to determine whether and in which direction are aimed effects of FDI.
Methods: The relation between FDI and domestic investments has been analyzed by employing panel data approach with and without constrains on cross-sections. The study is based on a panel data of six countries for the period between 2007-2018, (i.e., in total, we have 66 observations).
Findings & Value added: The general conclusion from this analysis confirm that inward foreign direct investments in the Western Balkans, as well as real economic growth both significantly and positively affect the domestic investments.
Key words: foreign direct investments / domestic investments / crowding in-effect / fixed effects model
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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