The effects of FDI net inflow on the current account of southeast Europe countries - a panel causality analysis

Kovačević, Radovan

doi:10.2298/eka2235095k

Cited by 3 publications

(3 citation statements)

References 46 publications

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“…The BoP imbalance is further deepened by the primary income deficit as a result of higher expenditures (outflows) than income from investments. At the same time, it should be pointed out that the greatest impact on the deficit of primary income is the expenditure for FDIs due to the repatriation of profits abroad (Kovačević, 2022). Both mentioned categories (balance of goods and primary income account) recorded the highest deficits in the last year of the observed interval.…”

Section: The Role Of Surplus Componentsmentioning

confidence: 94%

“…Generally speaking, the success of FDIs as a source of financing the CAD largely depends on the creation of opportunities for foreign investors to reinvest a significant part of their profits, and not repatriate them to their home countries, as is the case with the RS (Kovačević, 2022). Additionally, an increased inflow of FDIs can lead to an increase in imports (the case of Montenegro), which negatively affects the CA balance and further deepens the BoP problem (Fabris & Kilibarda, 2008;Ercegovac&Beker Pucar, 2021, Marjanović et.…”

Section: Source: Authors' Calculationmentioning

confidence: 99%

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Challenges of financing the current account deficit of the Republic of Serbia

Čakajac,

Janković,

Dimitrijević

2024

EurJ Appl Econ

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Developing countries, including the Republic of Serbia, due to the lack of capital and the disparity between domestic accumulation and investment spending find a solution for financing the current account deficit in the import of foreign capital, which results in financial balance surpluses. In conditions of insufficient inflow of foreign capital, an additional source of financing the balance of payments imbalance is borrowing abroad. The aim of the research is to identify the key sources of financing the current account deficit of the Republic of Serbia in the 2007-2022 period. The research results suggest that, although during the last few years the coverage of the current account deficit is largely provided by the net inflow of foreign direct investments, these funds are still not sufficient to ensure the financing of the deficit components of the current account of the Republic of Serbia. This is greatly contributed by the fact that one of the main deficit components is precisely the ever-increasing outflow of income that is realized on the basis of these investments. Due to all of the above, borrowing abroad is still used as an option for financing the deficit.

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Section: The Role Of Surplus Componentsmentioning

confidence: 94%

Section: Source: Authors' Calculationmentioning

confidence: 99%

Challenges of financing the current account deficit of the Republic of Serbia

Čakajac,

Janković,

Dimitrijević

2024

EurJ Appl Econ

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“…The contribution of ICT services in financing the deficit-reporting components of theSerbian CAD, 2007-2022 …”

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confidence: 99%

ICT services as a factor in financing the current account deficit of the Republic of Serbia

Čakajac,

Janković,

Luković

2023

Bizinfo

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The continuous current account deficit represents one of the most significant limitations of the economic development of the Republic of Serbia. The presence of a long-term current account deficit imposes the obligation to find the sources of its financing. During the last decade, the secondary income account played an important role in financing the current account deficit, primarily due to a stable inflow of remittances from abroad. Since 2011, the services trade surplus has been also contributing to offsetting the balance of payments deficit to an increasing extent mainly owing to the rising export of ICT services. Therefore, the goal of the paper is to identify the importance of ICT services in achieving the service trade surplus and, thereby, also in financing the current account deficit.

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Remittances as a source of external financing: Global and regional trends

Čakajac,

Janković,

Jelić

2024

Ekonomika

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Remittances are an important source of external financing for developing countries. Migration movements of the population from less developed to developed countries, in addition to a strong migration base, created the conditions for rising global remittance inflows. When it comes to developing countries, the above is particularly important, given that remittances represent a relatively stable source of inflow of foreign currency funds that partly improves the external imbalances in these countries. Also, these funds are of non-refundable nature, which means they do not increase the external indebtedness. The Western Balkan countries are the largest recipients of remittances among the developing countries in Europe. In addition, the share of remittances inflows in GDP is much higher in the Western Balkan countries compared to the EU member countries. The subject of research in this study is based on identifying the role of remittances as a source of external financing in developing countries. According to the subject of research, the aim is to establish the importance of remittances compared to other sources of external financing (foreign direct investment and official development assistance), with a special focus on the Western Balkan countries.

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The effects of FDI net inflow on the current account of southeast Europe countries - a panel causality analysis

Cited by 3 publications

References 46 publications

Challenges of financing the current account deficit of the Republic of Serbia

Challenges of financing the current account deficit of the Republic of Serbia

ICT services as a factor in financing the current account deficit of the Republic of Serbia

Remittances as a source of external financing: Global and regional trends

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