IMF Working Papers

Foreign Direct Investment in New Member State of the EU and Western Balkans: Taking Stock and Assessing Prospects

By La-Bhus Fah Jirasavetakul, Jesmin Rahman

August 21, 2018

Download PDF

Preview Citation

Format: Chicago

La-Bhus Fah Jirasavetakul, and Jesmin Rahman. Foreign Direct Investment in New Member State of the EU and Western Balkans: Taking Stock and Assessing Prospects, (USA: International Monetary Fund, 2018) accessed November 5, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

FDI has played a strong role in the export-led growth of eastern European countries that are now members of the European Union (EU). Largely sourced from advanced Europe, FDI inflows were motivated by the intention to pursue new markets and cost efficiency. Over time, foreign investment has restructured the exports sector in these countries in favor of products that are considered more technology-intensive. As these countries face skills shortage and rising wages, what is needed for FDI to continue playing a strong role? Can the Western Balkan countries, who are not yet EU members and have in recent years stepped up financial incentives and policy initiatives to court investors, emulate the experience? This paper takes stock of the FDI experience of both these groups and tries to estimate their potential gains from additional policy efforts.

Subject: Balance of payments, Corporate income tax, Economic sectors, Financial institutions, Foreign direct investment, Manufacturing, Stocks, Tax holidays, Tax incentives, Taxes

Keywords: Catching-up process, Corporate income tax, Determinants of FDI, EU accession, EU country, EU New Member States, Europe, FDI flow, FDI inflow, FDI stock, Foreign direct investment, Global, Gravity model, Host country, Inflow regression, Manufacturing, Panel analysis, Stocks, Tax holidays, WB country, Western Balkans, WP

Publication Details

  • Pages:

    37

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/187

  • Stock No:

    WPIEA2018187

  • ISBN:

    9781484373323

  • ISSN:

    1018-5941

You May Also Be Interested In...

The Federal Democratic Republic of Ethiopia: First Review Under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for The Federal Democratic Republic of Ethiopia

November 4, 2024

Grenada: Technical Assistance Report-Systemic Risk Monitoring

November 1, 2024

India: Technical Assistance Report-Review and Evaluation of the Reserve Bank of India’s Stress Test Model Framework

November 1, 2024

Republic of Armenia: Technical Assistance Report-Corporate Income Tax Gap Prediction 2023 Based on Corporate Income Tax Returns

November 1, 2024