The impact of foreign direct investment on export performance: case of European transition economies

Abstract

One of the most important conditions for succesful prosess of economy restructuring and efficient return into the global market framework of transition countries from Central and Eastern Europe, including Balkans region, is opening of these economies towards foreign investors. Export orientation of multinational companies has a significant impact on transition economies, especially from the Balkans, which are still fragile and exposed to different pressures. European integration processes also had the great effect, especially on the changes in the foreign trade exchange of transition economies and countries which were able to strengthen the exports sector and provide high level of exports, have gone through the process of transition more quickly and easily. The research presented in this paper is focused on the effects of foreign direct investments (FDI) in the last two decades, regarding relation of FDI to the export of goods and high-tech exports in transition economies, based on correlation analysis and including time-lag of one year. This analysis is covering eleven transition countries that are currently at different levels of economic development. As an imperative and guideline for the future, remains the focus on export oriented foreign direct investments, in order to harmonize two strategies on two fields: export competitiveness and attracting FDI.