Foreign Direct Investments in Bulgaria: Do They Have an Effect on the Economic Development of the Country?
Foreign Direct Investments in Bulgaria: Do They Have an Effect on the Economic Development of the Country?

Summary/Abstract: The article is trying to analyze the benefits of attracting foreign direct investments (FDI) and the supposed effect on the economic development in Bulgaria. The increase of FDI per capita is important for the penetration and absorption of FDI in the economy, as well as for the creation of new jobs. FDI’s accumulation demonstrates the relative increase of the absorptive capacity of the Bulgarian economy. The regressive analysis shows that there is a strong connection between the attracted FDI and the increase of GDP. Despite that FDI are increasing in processing industry and financial intermediation, the last years they are directed to the real estate, building and acquiring industrial, logistic and trade projects or to companies with intermediation or leasing activity. Thought the macroeconomic indicators in Bulgaria are relatively stable, the deficit in the current payment balance is deepening and the attraction of FDI is considered as a source for financial assistance. At present, and regardless of the strong relation between FDI and GDP, it is not possible to affirm that the increase of FDI in Bulgaria is contributing to the development of export-oriented economy. The global financial crisis also is creating an unfavorable economic environment, influencing negatively on the inflows of FDI in Bulgaria and on the economic development.

• Details
• Contents