The Relationship between Foreign Direct Investment and Institutional Quality in Western Balkan Countries

Minović, Jelena; Stevanović, Slavica; Aleksić, Vesna

doi:10.1080/19448953.2020.1818038

Cited by 16 publications

(11 citation statements)

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“…Research is replete on the impact of institutional quality on FDI–regional integration nexus in various regions (Gherghina et al, 2019; Minović et al, 2021), regional economic communities (RECs) (Malovic et al, 2019), developed and developing countries (Freckleton et al, 2012; Jude & Levieuge, 2017), transition/emerging economies (Delevic & Heim, 2017), as well as individual countries (Shah et al, 2016). More recent studies concerning institutional quality dynamics and their impact on several variables in Africa have been conducted.…”

Section: Introductionmentioning

confidence: 99%

Institutional Quality, Foreign Direct Investment, and Regional Integration: Empirical Evidence From CEN-SAD

Kwaw-Nimeson

Tian

2023

Sage Open

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This study investigates the institutional quality effects on the foreign direct investment (FDI)–regional integration nexus in the Community of Sahel-Saharan States (CEN-SAD). The novelty of our approach extends the regional integration theory in Africa by employing the Africa Regional Integration Index (ARII) and utilizes a dynamic panel data model based on the one-step system generalized method of moments (SYS-GMM) estimation to explore the institutional quality effects on the relationship between FDI location advantages and inflows and dimensions of regional integration. Our study highlights macroeconomic integration as the strongest indicator of regional integration as well as the most crucial determinant of FDI in CEN-SAD. We also discovered that FDI inflows into the lower-middle income countries (LMICs) were only slightly higher than in low-income countries (LICs). Our results infer that institutional reforms augment FDI location advantages and enhance FDI inflows irrespective of the level of integration in the Community.

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Section: Introductionmentioning

confidence: 99%

Institutional Quality, Foreign Direct Investment, and Regional Integration: Empirical Evidence From CEN-SAD

Kwaw-Nimeson

Tian

2023

Sage Open

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“…Investors are less likely to make investments in areas with complex bureaucracy, contradictory legislation and corrupt practices. Minović et al (2021) examines how foreign direct investment (FDI) and institutional quality indicators such as: corruption prevention; political stability; and rule of law, interact to one other in the Western Balkans. …”

Section: Literature Reviewmentioning

confidence: 99%

“…Minovi c et al (2021) examines how foreign direct investment (FDI) and institutional quality indicators such as: rule of law, interact to one other in the Western Balkans.…”

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confidence: 99%

A comparative analysis on the nexus between corruption and firm performance for a selection of Western Balkan countries

Kalaj

Golemi

2023

JFC

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Purpose This paper aims to focus on analyzing the level of corruption of small- and medium-sized enterprises and their economic performance impact in Western Balkan countries. This study uses survey data from Enterprise Surveys (ES) from 2019, a shared project of the European Bank for Reconstruction and Development, the European Investment Bank and the World Bank Group. The selected countries are Albania, Bosnia and Herzegovina, North Macedonia, Kosovo, Montenegro and Serbia. The questions included in the data set contribute to understanding what firms experience in the private sector. Collected data are based on firms’ experiences and enterprises’ perceptions of the environment in which they operate. Design/methodology/approach This paper measures enterprise performance in terms of sales, employees and fixed assets growth. The vector of independent variables comprises enterprise characteristics such as enterprise age, size, ownership structure, legal status, access to formal banking services, gender ownership and other composed variables. Moreover, to capture the level of perceived corruption by firms, we will focus on the following ES questions: “Is it common to have to pay some irregular additional payment or gifts to get things done with regard to customs, taxes, licenses, regulations, services,” and the “corruption payment” is defined in the form of a dummy equal to one if the enterprise replies “frequently,” “usually” or “always.” Findings Preliminary empirical research results shed light on the level and effects of corruption on enterprises’ performance. However, the magnitude and statistical significance are different among the countries included in the sample. Originality/value Instead of firm-level characteristics, research on corruption frequently focuses on effects dependent on national and institutional characteristics. To better identify the kinds of businesses that are most at risk of corruption, we have selected to focus on differences among firm characteristics in this research. Understanding factors at the firm level is preferred from a policy perspective because these findings assist policymakers to make recommendations.

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“…More robust institutional measures cause a higher inflow of FDI (Minović et al , 2021). Then FDI will have crowding-out (adverse) effects on DE at lower levels of development due to weak institutional capacities and crowding-in (positive) effects at higher levels of development due to solid institutional capacities (Slesman et al , 2021).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Foreign direct investment and domestic entrepreneurship: insights from Asia

Luu

2022

IJDI

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Purpose This paper aims to assess the relationships between foreign direct investment (FDI) and domestic entrepreneurship (DE) with the moderating role of formal institutions (FI) and informal institutions (II) and information communication technology (ICT) capacities in Asia. Design/methodology/approach This study is based on unbalanced panel data of 17 Asian countries from 2006 to 2018 at different stages of development, using the three-stage least squares estimation method. Findings The research findings indicate that FDI directly affects the establishment of domestic formal and informal entrepreneurship. In addition, FDI firms via the buffer mechanism of FI and II and ICT development for DE. Through its adjustment to the quality of institutions and ICT infrastructure, economic development determines the direction of FDI’s impact on DE. Originality/value The study findings grant empirical evidence and theoretical contributions to the relationship between FDI and domestic entrepreneurial development through the buffering mechanism of FI and II and the role of ICT.

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The Relationship between Foreign Direct Investment and Institutional Quality in Western Balkan Countries

Cited by 16 publications

References 0 publications

Institutional Quality, Foreign Direct Investment, and Regional Integration: Empirical Evidence From CEN-SAD

Institutional Quality, Foreign Direct Investment, and Regional Integration: Empirical Evidence From CEN-SAD

A comparative analysis on the nexus between corruption and firm performance for a selection of Western Balkan countries

Foreign direct investment and domestic entrepreneurship: insights from Asia

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