Title: The interaction of international trade and Foreign Direct Investment (FDI) under decisive Institutional Reforms in Bulgaria

Authors: A. Bitzenis, J. Marangos, A. Andronikidis

Addresses: University of Macedonia, 156 Egnatia Street, 540 06 Thessaloniki, Greece. ' Department of Economics, Colorado State University, Fort Collins, CO, USA. ' University of Macedonia, 156 Egnatia Street, 540 06 Thessaloniki, Greece

Abstract: The paper examines the interaction between FDI and International Trade in Bulgaria on the basis of successful structural and institutional reforms. After 1989, major changes took place in the political and economical scene in Bulgaria. The country has managed to successfully reform institutions and as a result liberalisation policies became effective in the transition to a market economy. This is evident in the entrance of Bulgaria into the EU, the increased FDI inflows and the re-orientation of trade activities towards the EU member countries. Our empirical research suggests that FDI and international trade are both complements and substitutes in the case of Bulgaria.

Keywords: international trade; foreign direct investment; FDI; institutionalism; Bulgaria; institutional reforms; structural reforms; trade liberalisation; transition economies.

DOI: 10.1504/IJTGM.2007.015577

International Journal of Trade and Global Markets, 2007 Vol.1 No.1, pp.69 - 88

Published online: 31 Oct 2007 *

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