Determinants of Greek FDI Outflows in the Balkan Region: The Case of Greek Entrepreneurs in Bulgaria

Abstract

This paper presents the specific motives behind Greek entrepreneurs' interests in FDI projects in Bulgaria, examining the obstacles that entrepreneurs and small to medium enterprises (SMEs) of Greek origin confronted in establishing FDI projects in Bulgaria in the transition period. Reasons for the great accumulation of Greek investors in the Balkan region, especially in Bulgaria, are analyzed, with special attention given to the difficulties in initiating multinational enterprises in a Balkan country such as Bulgaria.Finally, the paper examines whether the origin of an enterprise, the size of the firm, and the sector that each company belongs to played a role in the company's strategy to enter a Balkan country, and what the pros and cons of such a decision were.

International business in an EU candidate: the case of Bulgaria

“…Although, some more recent studies highlight the importance of non-financial motives and obstacles to foreign investors (see Bitzenis, 2006a), connoting approval of past research, other studies recognise as primary motives only the advantages on the low levels of labour cost and corporate tax, and as main obstacles the judiciary system, corruption, and organised crime (Kalotay, 2008).…”

A strategy for designing direct foreign investment service platform - a case study of Chinese SMEs in GMS

“…Except four large banks in Vietnam that are within the first 3,500 large banks rated by World Bank, all other banks in this region are rated beyond 3,500 [6] .…”

The impact of economic crisis on firm relocation: Greek SME movement to Bulgaria and its effects on business performance

“…The Bulgarian state, which seems more business-friendly than the Greek, has been an ''active agent'' for FDI in the last 25 years, like most states in Central and Eastern Europe (Hudson 2002). That is, it has been making efforts to create suitable circumstances for attracting foreign firms by providing incentives related to low taxation and labor cost and high formal institutional capacity (Slaveski and Nedanovski 2002;Bitzenis 2006). These conditions have attracted Greek entrepreneurs in the pre-crisis period.…”

“…Firm relocation from Greece to Bulgaria started in 1989 with the end of the previous regime and the transition of Bulgaria towards a free market economy (Labrianidis 1997). In the context of economic growth for Greece (3.9% annual average growth rate from 1996 to 2007, according to Eurostat), most businesspeople saw an opportunity to relocate to Bulgaria, seeking market expansion and reduction of operational cost (Bitzenis 2006). To the contrary, other entrepreneurs, mainly the owners of clothing firms, particularly in Northern Greece, moved to cope with competitive pressures and avoid business failure (Karagianni and Labrianidis 2001).…”

“…While other studies have examined relocation in two distinct periods of economic growth (Bitzenis 2006;Liao and Chan 2009), this manuscript presents the first-ever study that compares pre-and post-crisis business movements. Therefore, it contributes to the literature of business mobility (van Dijk and Pellenbarg 2000;Domański 2003;Brouwer et al 2004;Kiss 2007;Wright et al 2007;Smallbone et al 2012) by deepening our understanding about the effects of the crisis on firm relocation.…”