Is globalization consistent with the accumulation of FDI inflows in the Balkan countries? Regionalisation for the case of FDI inflows in Bulgaria

Abstract

Most large enterprises have “a global view” in the expansion of their activities and, thus, in the creation of their investment projects. They invest in specific countries when they conclude that the countries in question fulfill their goals. It is not enough that an economy of a country has as a target to become a market economy, to open its borders and to attract foreign direct investment (FDI) flows for the economy to become globalized, but it is necessary for this result to be shown by significant foreign participation and huge FDI and trade inflows into the host country. If this never happens, then the country will not benefit from globalization. From one point of view, multinational enterprises (MNEs) “decide” which countries benefit from economic integration and which countries successfully participate in the huge worldwide globalized economic chain. On the other hand, due to the large investment opportunities that a few countries offer to MNEs and due to the large number of host countries, at the end, MNEs invest only in specific countries. Thus, there are a lot of countries that are isolated from the whole system. Moreover, smaller MNEs in economic magnitude often extend their activities mainly to neighboring countries, in order to maximize their profits and minimize their costs. The share of FDI is not the same in all countries and the FDI inflows in less‐developing or poor countries show little growth or no growth at all. Today's FDI orientation is not as global as expected and there is a regional trend in those flows, when at the same time a few countries, especially from specific regions (such as the Balkan region) still live cut off from the world of FDI flows.

Citation

Bitzenis, A. (2004), "Is globalization consistent with the accumulation of FDI inflows in the Balkan countries? Regionalisation for the case of FDI inflows in Bulgaria", European Business Review, Vol. 16 No. 4, pp. 406-425. https://doi.org/10.1108/09555340410547017