Foreign Direct Investment and Economic Development : Comparative Analysis of Bulgarian, Romanian and Serbian Economies

Domazet, Ivana and Marjanović, Darko (2018) Foreign Direct Investment and Economic Development : Comparative Analysis of Bulgarian, Romanian and Serbian Economies. In: Western Balkans Economies in EU Integration : past, present and future. CEMAFI International Association, Nica, pp. 150-171. ISBN 979-10-96557-18-9

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Abstract

Foreign direct investment in most countries represents one of the key factors of economic development. That is the reason why attracting foreign direct investment is a necessary precondition for increasing production and exports, which to some extent contributes to stable economic growth. It is important to create a favorable investment environment, which will encourage investors to invest their capital in a particular country. In order to determine assumptions about the positive impact of foreign direct investment inflow in the overall economic development of the country receiving the investment, the analysis should be conducted to empirically verify these claims on a number of South East European countries. The main aim of this paper is to get an answer to the question of whether and to what extent foreign direct investment affects the economic development of selected countries in South East Europe. The methodology applied in this study involves the use of linear regression and correlation analysis, accessing the database of secondary data available to the World Bank. The results show that there are different levels of correlation between the observed macroeconomic indicators (foreign direct investment, gross domestic product, exports and imports) and the development of the analyzed countries of South East Europe.

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