Analysis by Aleksandra Angeloska
Foreign Direct Investment (FDI) plays an important role in a country’s growth and development. By attracting foreign investors, the generation of spillover in the host economies is expected because FDIs also transfer intangible assets to the affiliate, which may then diffuse to local firms. Despite years of wars and ethnic tussle, late transition, and financial and political crises, the Republic of North Macedonia has experienced significant FDI inflows in the last decade. This is due to an improved business climate and better policies for attracting foreign investors.
The aim of this study is to analyse and estimate the benefits from FDI in North Macedonia, between the period 2005-2018. The goal is to determine whether there is any positive correlation between FDI, the GDP, employment rate trends, and export. For the analysis, data from the Macedonian State Statistical Office, UNCTAD, the National Bank of the Republic of North Macedonia, and the World Bank is used. The main findings suggest that there is a positive correlation between FDI and the GDP, employment rate trends, and export.