IMPACT OF THE FDI ON UNEMPLOYMENT RATE IN COUNTRIES OF WEST BALKAN
In: Review of innovation and competitiveness: a journal of economic and social research, Band 3, Heft 2, S. 65-82
ISSN: 1849-9015
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In: Review of innovation and competitiveness: a journal of economic and social research, Band 3, Heft 2, S. 65-82
ISSN: 1849-9015
Modern economy is facing many challenges, in global terms. One of them is the high unemployment rate in many countries. That is a crucial problem, which jeopardises economic, social and political stability. Many factors have an impact to it, and some of them are globalisation, fast development of high technology, global economic crisis and expressed instability of financial markets. In addition, the relation of offer and demand is highly expressed in favour of the offer, the excess of capital at the global level is evident and seeks opportunities of investment as profitable as possible. The situation where the interests of big capital opposed to the costs is becoming more pronounced, which is reflected in the increasing growth of FDI in countries with lower operating costs. On the other hand, underdeveloped and developing countries spread the range of measures for attracting foreign direct investment (FDI), since it is one of the ways for increasing employment rate. This matter has already been the subject of numerous studies, particularly during the period of transition of countries in CEE. However, in modern frameworks, it is actualized again, with different circumstances and motives. In this article global unemployment rates, flows of FDI, their correlation in the Western Balkan countries and comparative analysis with chosen countries are presented. The period observed is 2000-2014. The paper is devoted to the influence of foreign direct investment on labour market. The interdependencies between FDI and unemployment were econometrical. The analysis showed that since 2009, there is a significant reduction of net investments, which is more obvious in the case of FDI due to a lower domestic and external demand as a result of the global economic crisis what led to a decreasing number of employees and rising unemployment. Results, also, show the absence of a positive impact of FDI on employment, which was present in most CEE countries during the transition period, as shown in numerous empirical studies.
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In: Ekonomske teme: Economic themes, Band 57, Heft 2, S. 165-179
ISSN: 2217-3668
Abstract
The paper analyses one of the most important economic issues relevant to most countries. The issue involves how to as painless as possible overcome the problems of high budget deficits and excessive accumulated public debt. Argentina and Serbia are used as an example. Argentina implemented rigorous saving measures in 2002 and Serbia began to implement restrictive budgetary measures in 2014. The effects of such a policy can be designed for the future. Results indicate that the key to Argentina's success lies in the transition to a floating exchange rate and the high level of correlation between the growth of the foreign exchange rate and growth in exports. When comparing strict fiscal policy in Argentina and Serbia, it should be emphasised that the measures in Serbia are far less stringent than those that were established in Argentina. But it also means that the effect of reducing budget expenditures should have less of an impact on GDP reduction than in the case of Argentina.