Deglobalization of the World Economy and its Effects on the Western Balkan Countries

Abstract

This paper analyses trends in three key aspects of economic globalization: international trade, foreign investment and global product chains. The paper points to downward tendencies of the world economic integration in all three segments. The paper finds that causes of these trends are not cyclical, but structural, that is, the process of deglobalization of the international market and transformation of the very foundations of the international economic system is underway. The paper also includes an empirical analysis of the potential effects of these changes on six economies of the Western Balkan. The multiple regression models reveal very strong statistic connection between these economies and the world economy trends. There are direct relations with global foreign trade and production, but inverse relation with FDI share in the world economy. That indicates significant challenges such as declining income and job losses, but also certain opportunities to reduce trade deficits and increase domestic production.

Western Balkans Trade with Russia and EU amid the Ukrainian Crisis — Threats and Opportunities

“…The enormous importance (share) of the EU market for the Balkan economy is always emphasised positively. However, high dependence on exports to any market is always a potential danger of emergencies over which the governments have no influence (Stanojević 2020a).…”

Building a Resilient Local Economy: The Influence of Global Crises on Deglobalization of the Tourism Supply System

“…While some authors see the main cause of advanced deglobalization trends in trade protectionism supported by political changes (Trumpism and Brexit) in economically the most powerful countries of the world, like USA and UK (e.g. James, 2018), others see it in the increase in the level of income and wages of the developing countries (Vargas-Hernández, 2022) or more likely in deep and serious structural changes in international trade (Stanojević, 2020). The findings of analysis done by Hillebrand (2010) suggests that if globalization halts or recedes the results will be profoundly negative for most countries and most income groups.…”

The Effects of Globalization on the International Competitiveness of the Western Balkan Countries

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