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The Balkan Paradox: Are Wages and Labour Productivity Significant Determinants of FDI Inflows?

The Balkan Paradox: Are Wages and Labour Productivity Significant Determinants of FDI Inflows? Although middle-income Balkan countries have attracted substantial FDI inflows, the level of that inflow is still significantly lower than the European average, with no visible redirection towards the Balkans. Both wages and labour productivity have had a significant impact on FDI inflows in European Union (EU) countries. This research aims to explore the significance of those variables in the countries of the Balkans. We have found that, in Balkan countries, FDI inflows respond negatively to shocks in labour productivity, which is contrary to the experience of EU countries. In EU countries, growth in gross wages has a negative impact on FDI inflows, while in Balkan countries, we found a paradoxical scenario, in that increased wages actually have a positive impact on FDI inflows. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Balkan and Near Eastern Studies Taylor & Francis

The Balkan Paradox: Are Wages and Labour Productivity Significant Determinants of FDI Inflows?

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The Balkan Paradox: Are Wages and Labour Productivity Significant Determinants of FDI Inflows?

Abstract

Although middle-income Balkan countries have attracted substantial FDI inflows, the level of that inflow is still significantly lower than the European average, with no visible redirection towards the Balkans. Both wages and labour productivity have had a significant impact on FDI inflows in European Union (EU) countries. This research aims to explore the significance of those variables in the countries of the Balkans. We have found that, in Balkan countries, FDI inflows respond negatively...
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Publisher
Taylor & Francis
Copyright
© 2020 Informa UK Limited, trading as Taylor & Francis Group
ISSN
1944-8961
eISSN
1944-8953
DOI
10.1080/19448953.2020.1818039
Publisher site
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Abstract

Although middle-income Balkan countries have attracted substantial FDI inflows, the level of that inflow is still significantly lower than the European average, with no visible redirection towards the Balkans. Both wages and labour productivity have had a significant impact on FDI inflows in European Union (EU) countries. This research aims to explore the significance of those variables in the countries of the Balkans. We have found that, in Balkan countries, FDI inflows respond negatively to shocks in labour productivity, which is contrary to the experience of EU countries. In EU countries, growth in gross wages has a negative impact on FDI inflows, while in Balkan countries, we found a paradoxical scenario, in that increased wages actually have a positive impact on FDI inflows.

Journal

Journal of Balkan and Near Eastern Studies – Taylor & Francis

Published: Jan 2, 2021

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