Economic Themes (2013) 51 (4) 9, 743-758
Marija Petrović Ranđelović, Snežana Radukić
Abstract: The importance of foreign direct investment in the process of economic development of the host country does not end with the transfer of capital as a necessary component for the growth, but also in the transfer of intangible resources of development. Transfer of capital through foreign direct investment has a direct impact on increasing national competitiveness, since its engagement in fixed investment raises the level of employment, increasing production, exports, but the transfer of intangible resources package achieves an indirect impact on improving the competitive performances. The link between foreign direct investment and national competitiveness is causal: foreign direct investment in the host country may potentially contribute to increasing national competitiveness, and vice versa, higher rankings of national competitiveness can be stimulating effect in attracting greater foreign direct investment flows. This paper will explain the relationship between these two variables, with special attention to their cause-and-effect relationship in the Republic of Serbia.
Keywords: national competitiveness; foreign direct investment; exports; market efficiency; Republic of Serbia.
AN ANALYSIS OF NATIONAL COMPETITIVENESS THROUGH THE PRISM OF FOREIGN DIRECT INVESTMENT
Marija Petrović Ranđelović, Snežana Radukić
Abstract: The importance of foreign direct investment in the process of economic development of the host country does not end with the transfer of capital as a necessary component for the growth, but also in the transfer of intangible resources of development. Transfer of capital through foreign direct investment has a direct impact on increasing national competitiveness, since its engagement in fixed investment raises the level of employment, increasing production, exports, but the transfer of intangible resources package achieves an indirect impact on improving the competitive performances. The link between foreign direct investment and national competitiveness is causal: foreign direct investment in the host country may potentially contribute to increasing national competitiveness, and vice versa, higher rankings of national competitiveness can be stimulating effect in attracting greater foreign direct investment flows. This paper will explain the relationship between these two variables, with special attention to their cause-and-effect relationship in the Republic of Serbia.
Keywords: national competitiveness; foreign direct investment; exports; market efficiency; Republic of Serbia.
