FOREIGN DIRECT INVESTMENT AND EXPORT PERFORMANCE: EMPIRICAL EVIDENCE FOR SOUTH EAST EUROPEAN COUNTRIES

A large body of empirical literature confirm that foreign direct investments (FDI) are an essential source of development for the most of countries, especially transition economies. The export oriented FDI has multi-fold contribution in the economies of the host countries. Therefore, the main objective of this paper is to analyze empirically the foreign direct investments and exports performance of South East European (SEE) countries, covering the period 1996-2013. The paper also investigates for the fixed effects and individual heterogeneity across countries and years. Based on the panel regression techniques and Least Square Dummy Variable (LSDV) regression method, FDI positively affect export performance in the sample countries in various model specifications. This implies that policy makers in those countries should facilitate the Multi-National Enterprises (MNEs) towards those areas relating further export promotion.