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Attractivity of the FDI in Western Balkans : evidence from the Central and Eastern European countries (CEEC)

One lesson of the transformation of CEECs during the 1990s and early 2000s has been that FDI was not initially considered as a tool for boosting economic transformations in the region. Today most of these economies rely on the accumulated stocks and the annual flows of capital to develop their specializations, deepen their economic transformation and linking their economies to the most advanced economies of the EU. There has not been clear vision of the role of FDI at the beginning of the transformation. Poland and the Czech Republic, for instance, have set up policies of transformation, notably privatizations, to avoid the presence of foreign investors. Privatizations in Hungary has been a « ; blessing in disguise » ; (see P. Mihaly) : selling assets to foreign investors has speed up the adjustment, transforming whole regions of the country, (Western Hungary, Budapest) into a new industrial network welcoming investment in sectors with strong added value. In other countries, achieving the systemic transformation, matching the objectives set up by the EU to become future members, (even for late comers like Slovakia) have paved the way to create a strong attractivity to FDI which account, in many ways (rate of investment, share in the GDP, share in value added, in exports, etc..) in the economic performance of these economies (see G. Hunya). To sum up, attractivity can be explained by different factors such as former specialization of those economies (see S. Radosevic), proximity, fragmentation and outsourcing of some functions of big corporations (Renault in Romania), macro policies, increasing local demand, etc.. Concerning Western Balkan economies we will elaborate two questions: • Do capital flows continue to poor in the region in direction of the “ late comers” which have delayed their economic adjustment? • What kind of competitive advantage can be build up in the region in order to follow what has been done in CEECs?

FDI ; CEEC ; European Union ; privatization ; economy

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