THE IMPACT OF THE INFLOW OF FOREIGN DIRECT INVESTMENTS ON THE ECONOMIC DEVELOPMENT OF SERBIA

Abstract

Foreign direct investments present one of the very important products of
globalization, by establishing a new economic concept of free international
movement of capital, people, goods and services. An analyses of the impact
of this type of international movement of capital on economic growth and
development is one of the modern tendencies of economic researchers. The
subject of this paper is the analysis of the impact of the level and structure of
foreign direct investment on the economic development of the Serbian economy,
where the impact of foreign direct investment inflow on economic growth,
current balance, manufacturing industry through the impact on total industry
turnover, employment and productivity will be separately considered. The aim
of this research is to prove the importance of FDI for developing countries, as
well as to point out the need to improve and enhance the business environment
in order to maximize FDI inflows. The main hypothesis of this research is that
foreign direct investments significantly contribute to the economic growth and
development of the Republic of Serbia. For the purposes of hypothesis analysis
and testing, a simple linear regression model was used in this paper. The research
was conducted for the period from 2010 to 2019. The obtained results present a
positive relationship between the inflow of foreign direct investment and GDP
growth, and show a positive relationship between growth of investments in
manufacturing and growth in productivity, employment and total turnover, and
show a positive relationship between FDI inflow and export value.