FDI inflows in selected Emerging European economies with reflections on economic growth

Abstract

The objective of this paper is to identify the top destination for FDI inflows as well as to analyze related growth progress in selected Emerging European Economies (EEEs) in order to suggest significant implications towards economic policy creators in Western Balkan countries. The authors conducted descriptive statistical analysis together with correlation analysis in the time period 1997-2019. The analysis of average FDI inflows includes following country groups: Visegrad States, Baltic States, Western Balkan and eleven new EU member states with regard to the structural break of Global Financial Crisis (GFC). The results suggest that the Visegrad States (particularly Poland) were the top locations for foreign investors in the analyzed time period. Having in mind a positive correlation link between significant FDI inflows, especially greenfield FDI inflows and economic growth, we suggest that Western Balkan countries should implement adequate measures to attract greater greenfield FDI inflows in order to stimulate real convergence towards developed European economies. Therefore, recommendations are directed towards economic policy of less developed countries of Western Balkan that need to continue to improve the quality of public institutions and infrastructure, as well as business environment and implementation of nonfinancial measures of promotional activities, in order to raise attractiveness of national market for foreign investors.