Regional vs non-regional investments in Western Balkans – An empirical analysis of the factors influencing the investment characteristics between 2000 -2021

Polovina, Nereida ORCID: https://orcid.org/0000-0001-9304-3402 and Wynne, Steven (2024) Regional vs non-regional investments in Western Balkans – An empirical analysis of the factors influencing the investment characteristics between 2000 -2021. In: BAM2024, 2 September 2024 - 6 September 2024, Nottingham Business School, Nottingham Trent University, United Kingdom. (In Press)

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Abstract

The aim of this paper is to investigate the dynamics of foreign (non-regional) and regional investments in the Western Balkans. Using a comprehensive dataset, covering a period between 2000-2021, we examine the features of non-regional and regional inward investment in the five countries of Western Balkans: Albania, North Macedonia, Montenegro, Bosnia and Herzegovina and Serbia. Our study shows that regional investment has increased across time and has increasingly replaced non-regional investment indicating a movement toward a sustainable regional economy. In our study, we also investigate changes in the purchase of control ownership across different industries before and after 2010, the period when EU accelerated the economic and accession programmes with Western Balkans. Our finding shows that at the industry level: communication, technology, and transportation as well as consumer goods are more likely to be selected by regional firms after 2010 and that investment is more likely to involve a purchase of control ownership. This suggests an increase in confidence in investment in the regional economy by the regional firms as opposed to non-regional foreign firms, consistent with a movement towards a sustainable regional economy.