This paper examines the relationship between the real exchange rate and the foreign trade imbalance in both the Western Balkan (WB) and Central and Eastern European (CEE) countries. During the most recent global economic crisis, examining the impact of the exchange rate on the balance of trade took on a particular importance. Countries used a variety of monetary policy regimes and, depending on their choice, they had different economic instruments available to deal with the crisis. The aim of the research was whether exchange rate devaluation and/or depreciation are capable of effectively and fully eliminating the negative effects of the global economic crisis, as well as the consequent poor export performance and contracted economic activity. Our findings show that during an economic crisis those countries that use their own currency cannot substantially adjust their trade deficit by depreciating their currency. Moreover, it is suggested that during the global economic crisis, the balance of payments deficit is not impacted significantly by the exchange rate, any more. In such cases, other factors play a more significant role, like as government spending, followed by foreign demand and direct investments.

This paper explores the economic relations between China and new E.U. member states and Western Balkan countries. China is an important trade partner for these countries, but in recent years the cooperation has been extended to include Chinese foreign direct investments (F.D.I.) inward investment. Using the Poisson pseudomaximum likelihood (P.P.M.L.) method to estimate a gravity model of bilateral trade, this study analysed the export flows of these countries as a function of total inward F.D.I. and Chinese F.D.I. as well. The results imply that F.D.I. inflows from China significantly increase the bilateral exports of the investigated countries, where F.D.I. has a greater impact on the exports of new E.U. member states than on Western Balkan countries.

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The world economic crisis that paralyzed the world economy in 2008 and 2009 had a profound impact on all countries in the world. Due to the interconnectedness of national economies the crisis spread rapidly from its centre in the United States to the world. There were two main transmission channels for the spread of the crisis between countries - international trade and the exchange of private capital between states in the form of foreign direct investment (FDI). This economic downturn has greatly influenced the domestic economic stability of the Western Balkan economies. The Western Balkan countries have shaped their economic policy towards European Union (EU) membership, resulting in a high degree of liberalization in international economic relations accompanied by a commitment to free international capital movement. Since this region has close economic ties with the EU the crisis spread to the region very quickly, manifesting itself in decreasing regional exports to the EU market and a downward trend of FDI inflow to the region. This paper will focus on the impact of the world economic crisis on the Western Balkan economies and especially on their exports and FDI inflow. Our empirical analysis, based on panel data, uses a wider sample of Central and Eastern European Countries (CEEC) which includes the Western Balkans, since we wanted to analyze if the effects of the economic crisis in the Western Balkans are specific or are common to most countries in transition. The analysis shows that Western Balkan exports have suffered due to the crisis, but reveals some interesting results on the different dynamics of export flows which depend on regional trade integration for their destination

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Most of the international trade today takes place through transnational corporations that have changed its structure and directions of activity. The scope of international transactions that occur within transnational corporations is increasingly replacing the classical cross-border forms of import and export of goods and services.The transition process and the opening of Montenegro towards the rest of the world has had its influence on significant inflows of foreign direct investments and the presence of a large number of companies controlled by foreign capital. If we neglected the sales data of foreign corporations' affiliates we would attain a distorted picture of the position of Montenegro in international trade. Through the analysis of the application of FATS statistics, which monitor the operations of these companies in Montenegro, we discovered the economic variables to which the foreign affiliates have made the greatest contribution. Our goal is to assess the benefits of Montenegro's participation in international trade. The focus of the work is on the calculation of the export of Montenegro through the application of this new statistical concept.

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