FOREIGN DIRECT INVESTMENTS AND EFFECTS IN DEVELOPMENT COUNTRIES

  • Vlatko Paceskoski
  • Emilija Miteva-Kacarski
  • Kostadinka Cabuleva

Abstract

Foreign direct investment (FDI) has long been seen as a crucial instrument in the process of transforming the former centrally planned economies of Eastern Europe into vibrant market systems. This paper analyze direct (as a capital inflow) and indirect impact of FDI inflows on economic growth of transition countries during 1990s. The main conclusion of this paper and a recommendation for policy makers is that FDI does not in every situation bring long-term benefits for the host countries. By improving the absorptive and adaptive capabilities of domestic firms and by adopting more active policies toward FDI, the development effects of FDI inflows are more likely to occur.
 
Key words: foreign investment, economic growth, developing countries, transition economies

Published
Sep 24, 2018
How to Cite
PACESKOSKI, Vlatko; MITEVA-KACARSKI, Emilija; CABULEVA, Kostadinka. FOREIGN DIRECT INVESTMENTS AND EFFECTS IN DEVELOPMENT COUNTRIES. Journal of Economics, [S.l.], v. 3, n. 2, p. 41-49, sep. 2018. ISSN 1857-9973. Available at: <http://js.ugd.edu.mk/index.php/JE/article/view/2461>. Date accessed: 24 oct. 2018.
Section
Economics (Microeconomics, Macroeconomics, International Economics)