E-Knjižnica FET "Dr. Mijo Mirković"

The role of foreign direct investment in raising national competitivness

Rovčanin, Adnan and Halilbašić, Muamer and Tatić, Kasim (2007) The role of foreign direct investment in raising national competitivness. In: 4th International Conference "Global Challenges for Competitiveness: Business and Government Perspective", 27-29. 9. 2007., Pula, Croatia.

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Renewed confidence in the positive benefits of FDI to the economic development of the host country has led many countries to be more open towards FDI since the begining of 1990s. As a result of increased liberalisation and technological advances, FDI flows rapidly increased during last few decades. FDI increased as a ration of domestic investment and GDP in many countries (UNCTAD, 2006a). However, while some countries attracted large FDI flows, others were less successful, even though they had liberalised FDI regimes. A huge number of different studies on the impact of FDI on economic growth and productivity of domestic economy have been published. A general conclusion of these studies is that the benefits of the foreign companies in terms of economic development, even though they possesses a bundle of desirable assets (including a long-term external financing, new technology, skills, management practice and market access), and in general they are more productive, pay higher wages and are more export intensive than local firms, are by no means automatic. In addition, researches showed that FDI can also lead to some less desirable or undesirable outcomes such as rising inequality between individuals or groups of individuals in the society and between the regions, direct or indirect crowding-out of local capabilities or an erosion of the tax base or labour and environmental standards. Development of the local absorptive capacity (skills, R&D, infrastructure and etc.), according to those analyses, has a key importance in shaping the ultimate effect of FDI, suggesting an important role of complementary policy. Different programmes of encouraging linkages between TNCs and local firms, programmes supporting clusterisation and upgrading FDI are also approved as important. This paper is organised as follows. The first section discusses the role of FDI in technology transfer, learning and competitiveness. Here we analyze benefits and costs of technology transfer through FDI flows and TNC subsidiary characteristics which enable them to contribute more to the national competitiveness of its host country. In the second section, we discuss the rationale for FDI policy and preset the experience of Ireland and Singapore since these two countries have been highlighted for using the best-practice policies toward attracting FDI. In the third section of the paper, using benchmarking methodology, we analyze FDI policy in Bosnia and Herzegovina by comparing it withe the experiences in the two countries. Finally, in the forth section we draw conclusions and give some policy recommendations.

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Tip objekta: Materijal konferencije ili radionice (Paper)
Dodatne informacije: 4/2007
Ključni pojmovi: foreign direct investment policy, competitiveness, Bosnia and Herzegovina, Politika direktinh stranih ulaganja, konkurentnost, Bosna i Hercegovina.
Teme: 3 Društvene znanosti > 33 Ekonomija. Ekonomska znanost > 339 Trgovina. Međunarodni gospodarski odnosi. Svjetsko gospodarstvo > 339.7 Međunarodne financije > 339.727.22 Uvoz kapitala. Priljev kapitala. Strana ulaganja
Odjeli: Odjel za ekonomiju i turizam "Dr. Mijo Mirković"
Datum pohrane: 17 Oct 2012 11:36
Zadnja promjena: 08 Jan 2013 07:30
URI: http://eknjiznica.unipu.hr/id/eprint/1585

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