Inward FDI in Bulgaria and its policy context

After the fall of the country's communist regime, Bulgaria faced great political instability, changing prime ministers eight times between 1990 and 1997. Three economic crises were associated with slow economic growth or even recession as well as high inflation rates that weakened the Bulgarian economy and discouraged inward foreign direct investment (IFDI) flows in the 1990s. The establishment of a currency board in July 1997 stabilized the economy and greatly increased foreign participation in the privatization process, leading to a major increase in IFDI flows. The entry of Bulgaria into the European Union (EU) in 2007 was a catalyst for IFDI. Bulgaria received US$28 billion of IFDI flows in 2007-2010, compared to only US$ 24 billion during the transition period from 1990 to 2006. A low corporate tax rate (10%) and EU membership have played a decisive role in attracting IFDI to Bulgaria

Foreign direct investment (FDI) during the transition from a planned to a market economy: The case of Bulgaria (1989-2001)

The main focus of this thesis is to provide an analysis of foreign direct investment inflows during the Bulgarian transition period from a planned to a market economy. The macroeconomic development, the legal framework, the privatisation deals and foreign participation in the Bulgarian banking system have been examined in the years 1989-2001 under the scope of FDI. Bulgaria has gone through significant changes in the years in question, initiated with the abolishment of communism in 1989 and the country's effort to become a market economy. FDI, on the other hand is an economic activity that assists countries in transition with a significant inflow of capital, technology and knowledge. The author analysed the reasons for the low FDI inflows in Bulgaria paying attention to the delayed transition, adverse initial conditions of the country, geographical distance from western countries, political instability and governmental inability and limited macroeconomic development. The analysis is also based on the consideration of Bulgarian historical elements, the legacy of the communist regime, the legal framework, the policies and reforms that have been used in the privatisation of state owned enterprises (SOEs) and in the banking system, and reference to the special role of Greek FDI outflows in Bulgaria has been made. Using a questionnaire survey we specified the most important incentives and barriers that an MNE considers when it decides to establish an FDI project in Bulgaria. The results were of great significance since we conclude that there is a "regionalisation" in the determination of FDI inflows in Bulgaria (dominant Greek investment interest). Moreover, with the help of a statistical analysis it was found that the sector that each MNE belongs to plays a decisive role in the determination of Bulgarian FDI inflows

Outward FDI from Greece and its policy context

With the fall of centrally planned economies in the Balkans, their liberalization and the opening of their borders to free trade and capital movements, Greece became more active in the generation of outward foreign direct investment (OFDI). Greece's OFDI stock increased from US$3 billion in 1990 to US$ 6 billion in 2000 and to US$38 billion in 2010. The Europeanization process of Turkey and the transition of the economies in the Balkans was accompanied by a gradual rise of FDI from Greece into those economies. More than half of Greece's OFDI stock — over US$ 20 billion in 2009 (67% of total) — is located in South-East Europe: in the Balkans, Cyprus and Turkey. While Greece's early OFDI flows were directed to the secondary sector to reduce costs, the bulk of later flows was directed to the services sector, as new markets were opened. This shift signifies the rise of major corporate players. The Greek Balkan policy, which commenced through the European Union, and the upgrading of the Athens Stock Exchange have positively affected Greece's position as a key regional investor. The expectations for sustaining this leading role, however, have been weakened recently since, due to the Greek sovereign debt crisis, Greek multinational enterprises (MNEs) disinvested US$ 1.6 billion from their FDI abroad in 2010

Determinants Of Barries To Quality Of Direct Foreign Investments Evidences From South & East Asian Economies

The objective of this paper is to examine whether FDI inflows in South & East Asian economies posses any barriers which are deterring to attract FDI of their actual potential? If so, what are those various set of barriers? These questions are addressed in this study using cross section time series data for 17 South and East Asian economies from 1996 to 2005.http://deepblue.lib.umich.edu/bitstream/2027.42/64376/1/wp910.pd

Inward and Outward FDI Country Profiles, Second Edition

This second edition contains a series of 77 standardized country profiles dealing with the inward and outward foreign direct investment (FDI) performance of 40 economies. The profiles have been peer-reviewed by a global network of experts. The publication is intended to contribute to the analysis of trends in foreign direct investment and policy issues related to them. More specifically, the individual profiles discuss FDI trends and developments (country-level developments, the corporate players); effects of the recent global crises; and the policy scene. Each profile contains a standard set of tables, including on FDI stocks and flows, sectoral and geographical FDI distributions, the largest M&As and greenfield investments, the principal foreign affiliates (for inward FDI), and the principal multinational enterprises (for outward FDI). The standardized template used to produce the profiles allows cross-country comparisons. The volume is meant to be a reference tool for anyone interested in foreign direct investment

The Universal Model of theories determining FDI revisited

The paper refers to 'a theoretical model' created by Bitzenis (2003), named Universal Model, that incorporates most of the Foreign Direct Investment (FDI) theories. What derives from the literature review is the comprehension of the relativity of each theory; there is no FDI theory that dominates the decision-making process of multinationals (MNEs) regarding FDI. Economists, MNEs and entrepreneurs may have a decisive interest in countries that open their economies aimed at attracting significant FDI inflows as a final goal. The investment opportunities appeared in various countries differ from time to time even in the same country diachronically.FDI theories; foreign direct investment; Aristidis Bitzenis; multinational enterprises; MNEs; transition economies; planned economies; Bulgaria; theoretical models; Universal Model; decision-making processes; economists; entrepreneurs; FDI inflows; investment opportunities; OLI; ownership location internalisation; government incentives; FDI determinants; globalisation; trade barriers; global markets.