Main Article Content
Research background: Foreign direct investment is perceived as a valuable tool for economic growth. The growth could be realized more or less as a set of benefits depending on the FDIs features. In the period from 2009 to 2016 a remarkable increase in the share of FDIs inflow in automotive sector in Macedonian economy was noticed, from 2.8% to 14.1%. Thus, there seem to be good reasons to examine the issue of how the increased FDI inflow expressed through the remarkable in-crease of FDIs inflow in the automotive sector.
Purpose of the article: The aim of the paper is to analyze the causality between the increased FDIs inflow in the automotive industry and a remarkable export growth. The research interest of the study is to recognize the importance of the FDIs inflow structure as a determinant of the export structure.
Methods: Within the paper a model is developed that identifies the FDIs as a factor of growth of the export performances. A regression analysis is used to examine the correlation between the FDIs inflow and export. In order to examine causality, the Granger causality test is applied between the FDIs inflow and increased export.
Findings & Value added: The results suggest that FDIs create a good basis for quantitative and qualitative shift in the export structure of the Macedonian economy. The paper associates growth of sectoral export with the growth of FDIs in that sector. Due to the increased FDI inflow in the automotive industry, this sector has significantly increased its share in the total Macedonian export. The paper indicates that FDIs can be considered as a way of engagement in the global supplying chains, which additionally influences positively the competitiveness and export performance of the host suppliers.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Baldwin, R. (2012). Global supply chains: why they emerged, why they matter and where they are going. The Graduate Institute Geneva CTEI Working papers, 13.
Baldwin, R. (2011b). Trade and industrialization after globalization’s 2nd unbundling: How building and joining a supply chain are different and why it matters. NBER Working Paper, 17716.
Baliamoune-Lutz, M. N. (2004). Does FDI contribute to economic growth? Knowledge about the effects of FDI improves negotiating positions and reduces risk for firms investing in developing countries. Business Economics, 39(2).
Bandelj, N. (2010). How EU integration and legacies mattered for foreign direct investment into Central and Eastern Europe. Europe-Asia Studies, 62(3). doi:10.1080/09668131003647846.
Christodoulakis, N., & Sarantides, V. (2011). External asymmetries in the euro area and the role of foreign direct investment. Bank of Greece Working Paper, 132.
Damijan, J., Kostevec, C., & Rojec, M. (2013). Global supply chains at work in Central and Eastern European countries: impact of FDI on export restructuring and productivity growth. SSRN Electronic Journal. doi: 10.2139/ssrn.2287550.
Damijan, J., Rojec, M., & Ferjancic, M. (2011). The growing performance of transition economies: EU market access versus supply capacity factors. Panoeconomicus, 58(4). doi: 10.2298/PAN1104489D.
Dritsaki, M., Dritsaki, C., & Adamopoulos, A. (2004). A causal relationship be-tween trade, foreign direct investment and economic growth in Greece. American Journal of Applied Sciences, 1(3).
Ekanayake, E. M., Richard, V., & Veeramacheneni, B. (2003). Openness and economic growth: empirical evidence on the relationship between output, inward FDI and trade. Journal of Business Strategies, 20(1).
Granger, C. W. J. (2003). Some aspects of causal relationship. Journal of Econometrics, 112(1). doi: 10.1016/S0304-4076(02)00148-3.
Greenaway, D., Sousa, N., & Wakelin, K. (2001). Do domestic firms learn to export from multinationals? Research on Globalization and economic policy (GEP). University of Nottingham.
Gujarati, N. D. (2003). Basic of econometrics. McGraw-Hill Companies.
Henn, C., Papageorgiou, C., & Spatafora, N. (2015). Export quality in advanced and developing economies: evidence from a new dataset. WTO Working Paper ERSD, 2. Retrieved from https://www.wto.org/english/res_e/reser_ e/ersd201502_e.pdf.
IMF (2015). The former Yugoslav Republic of Macedonia. IMF Country Report, 15.
Jindra, B., Giroud, A., & Scott-Kennel, J. (2009). Subsidiary roles, vertical linkages and economic development: lessons from transition economies. Journal of World Business, 44(2). doi: 10.1016/j.jwb.2008.05.006.
Khan, K., & Leng, K. (1997). Foreign direct investment, exports and economic growth. Singapore Economic Review, 42(2).
Kutan, A., & Vukšić, G. (2007). Foreign direct investment and export performance: empirical evidence. Comparative Economic Studies, 49(3). doi:10.1057/palgrave.ces.8100216.
Lipsey, E. R. (2006). Measuring the impacts of FDI in Central and Eastern Europe. Retrieved from http://www.nber.org/papers/w12808.
Liu, X., Wang, C., & Wei, Y. (2001). Causal links between foreign direct investment and trade in China. China Economic Review, 12.
Mahmoodi, M., & Mahmoodi, E. (2016). Foreign direct investment, exports and economic growth: evidence from two panels of developing countries. Journal Economic Research-Ekonomska Istraživanja, 29. doi: 10.1080/1331677x. 2016.1164922.
Moran, T. (2005). How does FDI affect host country development? Using industry case studies to make reliable generalization. Does foreign direct investment promote development. Washington DC: Institute for International Economics. Center for Global Development.
Pavlinek, P. (2015). Foreign direct investment and the development of the automotive industry in central and eastern Europe. In Foreign investment in eastern and southern Europe after 2008: Still a lever of growth?. Brussels: ETUI.
Pavlinek, P., & Zizalova, P. (2014). Linkages and spillovers in global production networks: firm-level analysis of the Czech automotive industry. Journal of Economic Geography, 1(33). doi:10.1093/jeg/lbu041.
Pacheco-Lopéz, P. (2004). Foreign direct investment, exports and imports in Mexico. Proceedings of the University of Kent Studies in Economics, 0404.
Radulescu, M., & Serbanescu, L. (2012). The impact of FDIs on exports and ex-port competitiveness in Central and Eastern European countries. Journal of Knowledge Management, Economics and Information Technology, 8.
Shaukat, A., & Wei, G. (2005). Determinants of FDI in China. Journal of Global Business and Technology, 1(2).
Statistical State Office (2017). New release: external trade. No: 7.1.17.02 Retrieved from http://www.stat.gov.mk/pdf/2017/7.1.17.02.pdf.
UNCTAD (2012). Trade and development report: policies for inclusive and balanced growth. New York and Geneva.
UNCTAD (2005). Developing countries in international trade 2005: trade and development index. New York and Geneva.
Wach, K., & Wojciechowski. L. (2016). Inward FDI and entrepreneurship rate: empirical evidence on selected effects of FDI in Visegrad countries. Journal of Economics and Management, 24(2). doi: 10.22367/jem.2016.24.04.
Zhang, K. H. (2006). FDI and host countries’ exports: the case of China. International economics, 59(1).
Zhang, K. H. (2001). How does FDI affect a host country’s export performance? The case of China. Economics of Transition, 9(3).
Zhang, Q., & Felmingham, B. (2001). The relationship between inward direct foreign investment and China’s provincial export trade. China Economic Re-view, 12.
Zysk, W., & Śmiech, S. (2014). The influence of foreign direct investment on foreign trade in the Visegrad countries from 2001 to 2011. Entrepreneurial Business and Economics Review, 2(3). doi:10.15678/EBER.2014.020302.