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

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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 21, 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:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/187
Stock No:

WPIEA2018187
ISBN:

9781484373323
ISSN:

1018-5941

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