MSc. Milaim Mehmeti, PhD(s)¹
¹ University ”Isa Boletini” – Mitrovica, Faculty of Economics, Kosovo
Email: milaim.mehmeti@umib.net
Abstract
The main aim of this research is to assess the challenges and implications of foreign direct investment (FDI) on GDP growth in Southeast European countries (SEE) (Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, and Serbia). Documents from various sources comprising official reports, scientific articles, and statistics of international institutions were employed to support this analysis. Specifically, panel data used as a secondary source, respectively from the World Bank, were extracted and then processed according to the required format. Panel data includes the period 2010-2022, which in total are 78 observation periods. The Generalized Method of Moments (GMM) is an econometric approach employed for analyzing whether FDI and various additional variables affect GDP growth. The GDP growth is specified as a dependent variable, while the independent variables are FDI, personal remittances (PR), and gross savings (GS). The econometric outcomes discovered that FDI and gross savings have a significant impact on economic growth for SEE, whereas personal remittances have turned out to have an insignificant positive effect. These discoveries can serve in some spheres, starting as a guide to identify the importance of each factor included in the research and the undertaking of concrete measures that can influence the improvement or redesign of policies. Likewise, it aims to provide a solid basis for opening discussions between scholars, students, and policy-making bodies.
Keywords
Impact, GDP growth, foreign direct investment (FDI), remittances, gross savings.
Introduction
Foreign direct investments have had different impacts on the GDP growth of South-Eastern European countries. One of the biggest impacts is the growth of the private sector and the creation of new jobs. FDI has brought new technologies, advanced management, and growth productivity. This has improved competition and helped integrate the local market into the global market. As well, foreign investments have helped in the evolution of certain economic sectors, improving the infrastructure and industrial capacities, depending on the stimulating policies of the state receiving the investments. According to, Moura & Forte (2013, p. 58) who researched the association between FDI and economic growth in some developing and developed countries argued that the effect of FDI depends on the internal situation of the host country.
Volume 9, No.1 (2024): April
ISSN 2661-2666 (Online) International Scientific Journal Monte (ISJM)
ISSN 2661-264X (Print)
DOI : 10.33807/monte.20243105
DOI URL: https://doi.org/10.33807/monte.20243105
Full Text: PDF
This is an open-access article under the CC BY-NC-ND license (creativecommons.org/licenses/by-nc-nd/4.0/)