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Foreign direct investment in the Western Balkans: what role has it played during transition?

Estrin, Saul ORCID: 0000-0002-3447-8593 and Uvalic, Milica (2016) Foreign direct investment in the Western Balkans: what role has it played during transition? Comparative Economic Studies, 58 (3). pp. 455-483. ISSN 0888-7233

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Identification Number: 10.1057/ces.2016.10


The paper explores the impact of foreign direct investment (FDI) on the economies of the Western Balkans during their transition to a market system. The paper recalls the political and historical circumstances that have delayed transition in the Western Balkans economies, and draws attention to the specific features of FDI that have influenced their economic development. The main hypotheses are formulated and basic tests performed on data from the manufacturing sector. However, data limitations mean that we can only test for horizontal, rather than vertical, spillovers and in practice we are not able to identify many significant horizontal spillover effects. This finding can probably be explained by various factors – institutional, economic and political – that have constrained FDI effects in the Western Balkan economies in comparison with the Central East European countries. Our work has important policy implications; in order to accelerate economic development, Western Balkan policymakers may need to implement more effective economic policies.

Item Type: Article
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Additional Information: © 2016 Palgrave Macmillan UK
Divisions: Management
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
JEL classification: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
L - Industrial Organization > L5 - Regulation and Industrial Policy > L53 - Government Promotion of Firms
P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P33 - International Trade, Finance, Investment, and Aid
Date Deposited: 23 Jun 2016 16:17
Last Modified: 29 May 2024 03:36

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