The (Reinvigorating) Role of Foreign Direct Investment after the Crisis

Abstract

This issue of the Journal of East–West Business contains the first volume of accepted scholarly work that responded to the call for papers on “Foreign direct investment in the European Union after the global financial and economic crisis” and completed successfully the double-blind peer review process. The initiation point of the call for papers was based on the fact that several countries did not fully recover from the devastating consequences of the recent multifaceted global crisis, which emerged in 2007 as a subprime mortgage and energy crisis (i.e., oil shock of 2007–2008) and gradually developed into a financial, sovereign-debt, and ultimately an economic crisis without precedent in post-war economic history. Under the consideration of macroeconomic data until 2015 (2014 for FDI), the call stressed that economic recovery in the West was fragile. While the United States (where the crisis commenced) and most European countries (where the crisis impacted the most economies) had recovered in terms of GDP and inward FDI, only two countries from the European Union (EU) had recovered in terms of employment and similarly, only seven EU countries had surpassed the amount of fixed investment (gross fixed capital formation) that was reported before they were hit by the crisis. The United States had also not recovered in terms of employment and fixed investment. Although the global financial and economic crisis triggered in 2007 has admittedly ended in the first half of 2010, full recovery is still in question. The impact of the crisis is still visible across the euro area as Eurostat data reveal that several members have not yet fully recovered in terms of GDP, fixed capital formation, and employment (Eurostat, n.d.). By the end of 2017 for example, six EU members (namely Croatia, Cyprus, Finland, Greece, Italy, and Portugal) did not fully recover in terms of GDP (i.e., surpassing the amount reported in 2008, before they were hit by the crisis in 2009). Fourteen EU members (namely Bulgaria, Croatia, Denmark, Estonia, Cyprus, Finland, Greece, Italy, Lithuania, Romania, Slovenia, Spain, and Portugal) did not fully recover in terms of gross fixed capital formation. By the end of 2016, eleven EU members (namely Austria, Belgium, the Czech Republic, Germany, none defined