Naslov
Strategy for attracting FDI - Comparative Study: Slovenia and Croatia

Autori
Štritof, Ivona

Vrsta, podvrsta i kategorija rada
Ocjenski radovi, magistarski rad

Fakultet
The London School of Economics and Political Science

Mjesto
London

Datum
01.09

Godina
1999

Stranica
45

Mentor
Staab, Andreas

Ključne riječi
foreign direct investment; strategy; host country; multinational company

Sažetak
Foreign Direct Investment (FDI) is, in many countries in transition, recognised as an important factor of modernisation and globalisation. After the collapse of the planned economy, it served both as hard currency income, and also enabled a transfer of technology, know-how, manager skills, etc. It had a direct impact on increasing companies’ efficiency and productivity and therefore, had an indirect impact on the economy of a whole country. The idea, behind a decision to compare Slovenian and Croatian strategy, was based on the possibility of applying the Slovenian strategy in Croatian case. Namely, Croatia and Slovenia have many similarities: ex-Yugoslavian Republics, small market, highly educated people, etc., and, therefore, they could apply the same strategy. If FDI plays an important role in the transformation of state-planned economies, then there is a significant possibility that FDI deserves credit for the good performance of the Slovenian economy. Slovenia is a model of successful economy in transition, which ranks it among the first candidates for the EU enlargement. However, Croatia has outperformed Slovenia in FDI inflows during the last several years. Both countries, thus far, have been poor receivers of FDI. The question that emerges here is: What are the reasons for that? Slovenia fulfils many of the necessary criteria for the inflow of FDI: economic and political stability, constant growth, good international relations (e.g. the European Union (EU), Central and Eastern Free Trade Area (CEFTA)), etc. But, in contrast to other well-performing countries in the region, Slovenia has not been practising an active policy toward attracting FDI. The consequences of the small FDI stock are already visible. Namely, Slovenian companies started to lose competitiveness on the EU market, especially domestic-owned companies. Research by Rojec shows that foreign owned companies in Slovenia perform better performances than domestic-owned companies. The Slovenian Government, alarmed by the increase in current account deficit (along with the decrease of exports, imports increased), adopted the Scheme for Attracting Inward Foreign Direct Investment. One of the aims of the Scheme is the creation of strategic policy for attracting FDI, which should include much more than just incentives to foreign investors. By adopting the Law on Investment Promotion, the Croatian Government, also expressed its more open approach to FDI. As in the case of Slovenia, the Government has thus far practised a passive policy toward FDI (e.g. the process of privatisation). In addition to the lack of FDI, Croatia has been, since proclaiming its independence, burdened by political and economic instability, and by isolation from the international organisations, like World Trade Organisation (WTO) and CEFTA, and regional integrations, like the EU. Therefore, its future strategy should take into consideration many factors which are not directly connected to FDI. This paper will discuss problems caused by the lack of national strategies for attracting FDI. And, therefore, it will stress the need for their creation. In addition, the paper will propose the questions that should be asked when preparing the strategy.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA