inostrani kapital kao faktor razvoja zemalja - Ekonomski fakultet u ...

Finland and Norway. Lheem and Guo (2004) who tested both FDI-led growth
model and growth-driven FDI model in China found that China might have
experienced these two effects simultaneously. In summary, empirical studies
provide mixed results finding both unidirectional and bi-directional causality.
The impact of FDI on economic growth is therefore, a controversial topic
among economists. Some researchers confirm the positive impact of FDI on a host
country’s development (Borensztein et al., 1998, Baliamounte-Lutz, 2004,
Asheghian, 2004), while others insist that its influence is ambivalent or negative
(Haddad and Harrison, 1993). According to the modernization hypothesis, FDI is
the most critical impetus for economic growth because it goes along with advanced
technology and managerial knowledge, spreading the benefits thereof throughout
the economy (Tsai, 1994, Makki and Somwaru, 2004).
Other researchers argue that even if the inflow of FDI has a positive impact in
the short run, it has an adverse long-term impact, as reflected in the negative
correlation between the stock of FDI and economic growth (Bornschier, 1980).
In addition, political, social and cultural factors are major determinants of FDI
(Bornsztein et al., 1998, de Mello, 1999). The location of the host country also
plays an important role in the flow of FDI, being seemingly easier to manage a
subsidiary that is close to the home country. Gopinath and Echeverria (2004),
however, found that distance has a negative effect on the trade-FDI ratio, which
means that countries switch from trade to FDI, the farther the receiving economy is
from the home country. The market size can be another determinant of FDI,
although Brenton and Di Mauro (1999) found no significant impact of market size
on FDI in CEE countries. According to Zhang and Song (2000), the impact of FDI
varies across countries, because of different development stages.
Another influence of FDI is on the external balance of a country. The effect of
FDI depends primarily on whether the motivation for the inflow of capital is
‘market seeking’ or ‘efficiency seeking’. In the first case, the effect of FDI inflow
on trade balance of the host country is expected to be negative (Varamini and
Matty, 1998) as the product produced by the MNC is expected to be sold primarily
in the host country. In this case, there is an inflow of intermediate goods to the host
nation without much contribution to exports. On the other hand, if the main
motivation for undertaking FDI is to seek lower cost input, it is quite likely that the
net export in the host country could increase, creating a positive effect on the trade
balance of the nation. The effect of FDI on national economies may have positive
and negative consequences: the positive are connected with the inflow of foreign
money, improving the external balance of the country, plus the contribution of
know-how in the production activities started and improvement of the trade
balance, if products and services are sold to foreigners. The negative may be in the
short run, the need of importing products and services to curb on activities, plus, in
the long run, reliance of the locals on mostly foreign contribution in the
development strategy of the nation.
6