International Scientific Conference 2016

THE IMPACT OF FOREIGN DIRECT INVESTMENT ON EMPLOYMENT IN THE REPUBLIC OF SERBIA

Marija Petrović-Ranđelović, Gordan Janković

Abstract:  From the aspect of the present distance it could be concluded that high unemployment is a chronic problem that Serbian economy is facing since the beginning of the intensive reform process. This basically a structural problem is the result of still unfinished privatization process and on that basis the dominant model of the entry of foreign direct investment over the mergers and acquisitions in the privatization process. In relatively developed literature on foreign direct investment and economic development one of the issues which the special attention of researchers refers is the way in which foreign direct investment contribute to increasing employment in the host country. Research has shown that there are numerous channels through which foreign direct investment, directly or indirectly contribute to the achievement of this important goal of economic policy of the host country, as well as the size of manifested effects depends on the motives for undertaking foreign direct investment, entry mode of foreign direct investment in the host country, as well as sectoral orientation of investment. For this reason, this paper aims to highlight the role of foreign direct investment in increasing employment in the host country and to contribute to a clearer understanding of the impact of foreign direct investment on employment in the Republic of Serbia, as well as the potential constraints to maximize their positive effects on the exercise of this important economic policy objective.

Keywords:  foreign direct investment, privatization, Republic of Serbia.

Published: March 24, 2017.  p. 57-70   PDF