The impact of FDI on the economic development of Serbia

Rapaić, Stevan (2017) The impact of FDI on the economic development of Serbia. Ekonomika preduzeća, LXV (5-6). pp. 381-392. ISSN 0353-443X

Text ekonomika_preduzeca_5-6-2017_190901_90648_459-55-66.pdf - Published Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (364kB)

Abstract

Previous studies that attempted to answer whether FDI contributes to economic development of the host economy came up with conflicting results. Scientific community is still divided over the very concept of spillover effects, which is based on the thesis that FDI has a positive effect on local companies, thus stimulating the host economy. According to this theory, employment growth is among the main benefits of FDI inflow for the host country. Given that unemployment is the biggest problem of the Serbian economy, FDI is perceived by the public as the best remedy for alleviating the consequences of the transition period and rapid privatisation. Convinced in the omnipotent effect of FDI on the economy of the host country, the Republic of Serbia has invested significant resources in their subsidising. This policy of attracting foreign direct investments was implemented through non-transparent measures, which resulted in the inflow of FDI whose main purpose was to obtain the share of the market or provide lower operating costs through privatisation. It was unclear whether the FDI inflow of over 20 billion euros contributed to the economic development of Serbia in the2001– 2013 period. The author attempted to provide an answer to this question by using correlation analysis, in order to determine whether there is a relation between FDI inflow and eleven selected indicators of economic development of Serbia.

Actions (login required)

View Item