Jelena Andrašić, Vera Mirović, Branimir Kalaš

DOI Number
First page
Last page


Foreign direct investment has a significant role in Southeastern European countries. The aim of the paper is reflected in assessing the character and nature of the relationship between macroeconomic factors and foreign direct investment in Southeastern European countries. Further, the subject of paper includes the examination of the impact of selected macroeconomic variables on foreign direct investment in six countries for the period from 2000 to 2012. The selected countries are Albania, Bosnia and Herzegovina, Bulgaria, Macedonia, Romania and Serbia. The research includes an examination impact of market size, national competitiveness and employment on foreign direct investment. By using the Hausman test, it was confirmed that the fixed effect model is an appropriate model in panel analysis. Based on the result, it determined the positive impact of market size, while the industry's share of GDP and employment have a negative impact on this variable. Also, the results confirmed that only the market size of the countries significantly affected on the flow of foreign direct investment in Southeastern European countries.


foreign direct investment, macroeconomic factors, Southeastern European countries.

Full Text:



Agarwal, S. (1994). Socio-cultural distance and the choice of Joint Ventures: A contingency perspective .Journal of International Marketing, 2(2), 63-80.

Agencija za strana ulaganja i promociju izvoza [Agency for Foreign Investments and Export Promotion] (2015). retrieved from

Ang, S. H., & Michailova, S. (2008). Institutional Explanations of Cross-Alliance Modes: The Case of Emerging Economies Firms. Management International Review, 551-576.

Aqeel, A., & Nishat M. (2004). The determinants of foreign direct investment in Pakistan. The Pakistan Development Review, 43(4), 651-664.

Artige, L., Nicolini, R. (2005). Evidence on the Determinants of Foreign Direct Investment: The Case of Three European Regions.

Aseidu, E. (2002). On the Determinants on Foreign Direct Investment to Developing countries: Is Africa Different? World Development, 30(1), 107-119, DOI:10.1016/S0305-750X(01)00100-0

Aulakh, P. S., & Kotabe, M. (1997). Antecedents and perfomance implications of channel integration in foreign markets. Journal of International Business Studies, 28(1), 145-175, DOI:10.1057/palgrave.jibs.8490096

Bevan, A. A., & Estrin, S. (2004). The determinants of foreign direct investment into European transition economies. Journal of Comparative Economics, 32, 775-787, DOI:10.1016/j.jce2004.08.006

Bevan, A., Estrin, S., & Meyer, K. (2004). Foreign investment location and institutional development in transition economies. International Business Review, 13(1), 43-64, DOI: 10.1016/j.ibusrev.2003.05.005

Brooks, C., (2008). Introductory Econometrics for Finance, Cambridge, University Press.

Brouthers, K. D. (2002). Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies, 33(2), 203-221, DOI:10.1057/palgrave.jibs.8491013

Brouthers, K. D., & Brouthers, L. E. (2000). Acquisition or greenfield start-up? Institutional, cultural and transaction cost influences. Strategic Management Journal, 21(1) , 89-97, DOI:10.1002/(SICI)1097-0266(200001)

Campos, N. F., & Kinoshita, Y. (2003). Why Does FDI Go Where it Goes? New Evidence from the Transition Economies. IMF Working Papers 03/228, International Monetary Fund.

Charkrabarti, A. (2001). The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross-Country Regressions. Kyklos (International Review for Social Sciences) 54(1), 89-114.

Demirhan, E., & Masca, M. (2008). Determinants of foreign direct investment flows to developing coutries: A cross-sectional analysis. Prague Economic Papers, 4, 356-369.

Derado, D. (2013). Determinants of FDI in transition countries and estimation of the potential level of Croatian FDI. Financial Theory and Practice, 37(3), 227-258.

Dunning, J. H. (2001). Paradigm of International Production: Past, Present and Future. International Journal of the Economics of business, 8(2), 173-190.

Erramilli, M. K., & Rao, C. P. (1990). Choice of foreign market entry modes by service firms: Role of market knowledge. Management International Review, 30(2), 135-150.

Hornberger, K., Battat, J. & Kusek, P. (2011). Attracting FDI: How Much Does Investment Climate Matter? The World Bank Group, Financial and Private Sector Development Vice Presidency, Note no. 327 in: Ranđelović, P. M, Milić, J. V. & Kostadinović, I. (2017). Market size as a determinant of the foreign direct investment in flows in the Western Balkans countries.Facta Universitatis, Series: Economics and Organization, 14(2), 93 – 104.

Kok, R., & Ersoy, A. B. (2009). Analyses of FDI determinants in developing countries. International Journal of Social Economics, 36(1/2), 105–123.

Kudina, A., & Jakubiak, M. (2008). The Motives and Impediments to FDI in the CIS. Global Forum on International Investment.

Marjanović, V., & Marjanović, M. (2014). Podsticanje razvoja industrije kao ključna determinanta strategije restrukturiranja privrede Republike Srbije. [Simulation of industrial development as the key determinant of the strategy of Serbia economic restructuring]. Teme, 38(4), 1425–1444.

Martinez-Zarzoso, & Nowak-Lehmann, F.D. (2004). Economic and geographical distance: Explaining Mercosur Sectoral Exports to the EU. Open Economies Review, 15(3), 291-314.

Nasir, A. (2016). Market Size, Exchange Rate and Trade as a Determinant of FDI the Case of Malaysia. American Journal of Business and Society, 1(4), 227-232.

Neuhaus. M. (2006). The Impact of FDI on Economic Growth, Springer-Verlag Company.

Pelinescu, E., & Radulescu, M. (2009). The Impact of Foreign Direct Investment on the Economic Growth and Countries' Export Potential. Romanian Journal of Economic Forecasting, 4, 153-169.

Pritchett, L. (2000). Understanding Patterns of Economic Growth: Searching for Hills among Plateaus, Mountains and Plains”, World Bank Economic Review, UNCTAD Investment Brief, No.2 2008

Radukić, S., & Ranđelović, P. M. (2014). Strane direktne investicije kao imperativ unapređenja konkurentnosti srpske privrede u postkriznom periodu. [Foreign direct investment as an imperative for improving the competitiveness of Serbia economy in the post-crisis period]. Teme, 38(2), 507–526.

Ranđelović, P. M, Milić, J. V. & Kostadinović, I. (2017). Market size as a determinant of the foreign direct investment in flows in the Western Balkans countries. Facta Universitatis,

Series: Economics and Organization, 14(2), 93 – 104.

Resmini, L. (2000). The determinants of foreign direct investment in the CEECs: new evidence from sectoral pattern. Economics of transition, 8(3), 665-68.

Rodriguez, X. A., & Pallas, J. (2008). Determinants of foreign direct investment in Spain. Applied Economics, 40(19), 2443-2450, DOI:10.1080/00036840701367606

Sasi, I.,& Hristos, D. (2015). Does Growth Attract FDI? Economics Discussion Papers, No 2015-18, Kiel Institute for the World Economy. http://www.economics

Satomi, K., David, S., & Nigel, D. (2007). Macro determinants of FDI inflows to Japan: An analysis of source country characteristic. Aston University

Scott-Kennel, J., & Enderwick, P. (2004). Inter-firm Alliance and Network Relationships and the Eclectic Paradigm of International Production: An Exploratory Analysis of Quasi-internalisation at the Subsidiary Level. International Business Review, 13(4), 425-445, DOI:10.1016/j.ibusrev.2004.03.004

Shukurov, S. (2016). Determinants of FDI in Transition Economies: The case of CIS Countries. Journal of International and Global Economic Studies, 9(1), 75-94.

Somlev, I. P., & Hoshino, Y. (2005). Influence of location factors on establishment and ownership of foreign investments: The case of the Japanese manufacturing firms in Europe. International Business Review 14, 577-598.

Stefanović, S. (2008). Analitical framework of FDI determinants: Implementation of the OLI Model. Facta Uneversitatis: Economics and Organization, 5(3), 239-249.

Stoian, C., & Filippaios, F. (2008). Dunning's eclectic paradigm: A holistic, yet context spcecific framework for analysing the determinants of outward FDI Evidence from international Greek investments. International Business Review, 17(3), 349-367, DOI:10.1016/j.ibusrev.2007.12.005

Sun, Q., Wilson, T., & Yu, Q. (2002). Determinants of foreign direct investment across China. Journal of International Money and Finance, 21(1), 79-113, DOI:10.1016/S0261-5606(01)00032-8

Tarzi, S. (2005). Foreign Direct Investment into Developing Countries: Impact of Location and Government Policy" . The Journal of Social, Political and Economic Studies, 30(4), 497-516.

Thomas, D. E., & Grosse, R. (2001). Country-of-origin determinants of foreign direct investment in an emerging market: the case of Mexico. Journal of International Management, 7(1), 59-79, DOI:10.1016/S1075-4253(00)00040-5

Uvalić, M. (2012). Tranzicija u Srbiji – ka boljoj budućnosti. Beograd.

Villaverde, J., & Maza, A. (2012). Foreign direct investment in Spain: Regional distribution and determinants. International Business Review, 21(4), 722-733, DOI:10.1016/j.ibusrev.2011.08.004

Wei, Y., Liu, X., Parker, D., & Vaidya, K. (1999.). The regional distribution of foreign direct investment in China. Regional Studies, 33(9), 857-867, DOI:10.1080/00343409950075498

World Bank (2015), retrieved from



  • There are currently no refbacks.

Print ISSN: 0353-7919
Online ISSN: 1820-7804