Impact of Macroeconomic Factors on Foreign Direct Investment in Selected Southeastern European Countries

Abstract

Foreign direct investment has a significant role in Southeastern European countries. The aim of the paper is reflected in assessing the character and nature of the relationship between macroeconomic factors and foreign direct investment in Southeastern European countries. Further, the subject of paper includes the examination of the impact of selected macroeconomic variables on foreign direct investment in six countries for the period from 2000 to 2012. The selected countries are Albania, Bosnia and Herzegovina, Bulgaria, Macedonia, Romania and Serbia. The research includes an examination impact of market size, national competitiveness and employment on foreign direct investment. By using the Hausman test, it was confirmed that the fixed effect model is an appropriate model in panel analysis. Based on the result, it determined the positive impact of market size, while the industry's share of GDP and employment have a negative impact on this variable. Also, the results confirmed that only the market size of the countries significantly affected on the flow of foreign direct investment in Southeastern European countries.

The Impact of Corporate Income Tax on Fdi Inflow in Emerging Eu Economies

“…The large number of studies also researched the impact of FDI inflows, since it is often seen as one of the factors that increases the economic growth of the country (Hunady & Orviska, 2014). FDI had essential role for the emerging EU economies (Andrašić et al 2018). The emerging EU economies went through successful transitions thanks to capital inflow in multinational companies (Bevan & Estrin, 2004;Walkenhorst, 2004).…”

“…On the other hand, FDI movements recorded more fluctuations in comparison to tax rate changes in the emerging EU economies. Since FDI was recognized as a generator of the economy (Hunady & Orviska, 2014), FDI was targeted as a crucial factor for the emerging EU economies in the 1990s (Andrašić et al 2018). If historical aspect was taken into account, most of the selected emerging economies of the EU were former countries of the Soviet Union and Yugoslavia.…”

Coordination vs. Competitiveness of Effective Average Tax Rates in Relation to FDI: The Case of Emerging EU Economies

“…Tax incentives are commonly used by emerging and developing countries, with some variation across sectors and regions. In this paper, the focus is on emerging EU economies, where Hunady et al [33] noted that FDI is recognized as a main generator of economic growth [34][35][36]. The inflow of foreign capital and the presence of multinational companies plays a crucial role in the successful transition of these countries [37,38].…”

“…The transformation from state or social property to private property has been primary. Namely, privatization enables the inflow of foreign capital, which in emerging EU economies is recognized as an essential driver of economic growth and development [33,34]. Thus, the entry of multinational companies into the market has significantly contributed to the successful transformation of the system [37].…”

Утицај Пореских Олакшица На Пословање Страних Инвеститора У Србији

“…Since multinational companies invest their private capital in certain individual countries, the motive of these companies is of economic nature . Foreign capital is a very important part of economic flows and a necessary requirement for the faster development of national economies (Andrašić et al, 2018). The main motives of each multinational company for investing capital in a foreign country, among other things, are profit, a new market, favorable conditions for the use of resources, and the benefits of the tax system (Nishiyama & Yamaguchi, 2010).…”