Does Enhancing of the Competitiveness Influence on Foreign Direct Investments in Western Balkan Countries?

Abstract

Foreign direct investments present a valuable source of national competitiveness as they have attributes of capital flows provide knowledge and technology transfer from one country to target country. In this paper are used variables defined by World Economic Forum which construct Global Competitiveness Index for assessing competitiveness of the country. The purpose of the research is to examine does the national competitiveness increase enhance the level of FDI flows in transition Western Balkan economies that are not yet full members of European Union. The findings claim that larger increase in FDI per capita stocks in majority analyzed countries would have if making infrastructure more competitiveness, accelerate their technological readiness and improve innovation while certain countries should work on health and primary education and higher education and training. According to the results, there is no correlation between FDI flows and macroeconomic environment, institutions, development of financial markets, good market efficiency, labor market efficiency and business sophistication. Applying benchmark method, it is established the most competitive WB country as benchmark value for other transition countries in its neighborhood for enhancing their competitiveness, specially in the regional market. Also, it is obtained what if analysis to detect potential rise of FDI per capita stocks as a consequence of potential changes in some competitiveness variables. It is also calculated the potential increase in FDI/capita due to similar changes in different competitiveness variables.

Moderated Mediation Effects of Economic Freedom on FDI Under Different Levels of Political Stability

“…Other studies showed that competitiveness is also very important factor for FDI in Central and Eastern European countries (Paul, Popovici, & Cǎlin, 2014;Popovici & Călin, 2012). Zlatković (2016) found very similar results with positive effects of each competitiveness pillar and FDI for the Balkan countries. Very extensive research in this field has been conducted by Curtis, Rhoades, & Griffin (2013).…”

“…Foreign direct investments are highly important for developing countries especially because they provide different benefits such as provision of capital or transfer of technology. Positive effects of global competitiveness on foreign direct investments is well-known fact from practice and confirmed by different empirical studies (Popovici & Călin, 2015;Anastassopoulos, 2007;Zlatković, 2016;Curtis, Rhoades, & Griffin, 2013). Anastassopoulos (2007), based on the sample of 15 EU member countries, found a positive effect between competitiveness and FDI inflows.…”

“…11, No. 6;2020 Published by Sciedu Press 279 ISSN 1923-3981 E-ISSN 1923-399X Curtis et al, 2013;Paul et al, 2014;Popovici & Călin, 2015;Popovici & Călin, 2012;Zlatković, 2016), it was highly justified to observe the indirect effects of economic freedom which have not been sufficiently explored by existing studies.…”

“…Almfraji & Almsafir (2014) pointed on the literature that discusses the effects of foreign direct investments (FDIs) on economic growth. Having in mind the importance of FDIs on economic growth, some scholars promote the various factors in attracting FDIs (Popovici & Călin, 2015;Zlatković, 2016). Several studies have shown that global competitiveness is a highly important factor in attracting foreign direct investment inflow.…”

Does BRICS partnership really matter in price competitiveness and external sector growth?

“…Kordalska and Olczyk (2015) observe reverse causality between economic growth and competitiveness. Providing knowledge and technology transfer along with the attributes of capital inflows, FDI constitutes a valuable source of national competitiveness to the target country (Zlatcovic, 2016). Competitiveness revealed by costs and embedded technology can have significant effects on export market performance (Carlin et al , 2001).…”