Title: International business spillovers in South Eastern Europe: members of the stability pact

Authors: Vasileios A. Vlachos

Addresses: Department of International and European Studies, University of Macedonia, 156 Egnatia Street, Thessaloniki 54006, Greece

Abstract: This study aims to investigate the effect of international business to productivity levels of members of the Investment Compact (IC) programme – an initiative under the umbrella of stability pact for South Eastern Europe (SEE). Although the findings are mixed, they indicate clearly the limited effect that the domestic direct investment associated with international business has on labour productivity, compared with the technology spillovers of Foreign Direct Investment (FDI). The limited access to credit within the region of SEE for the generation of investment funds promotes FDI to a vital ingredient for economic growth. In view of the intense competition to attract FDI, SEE is not only on the verge of having a competitiveness issue, but also in danger of dealing with a contraction in investment expenditure, labour productivity and economic growth.

Keywords: labour productivity; technology spillovers; stability pact; South Eastern Europe; domestic direct investment; foreign direct investment; FDI; economic growth.

DOI: 10.1504/IJEPEE.2011.039567

International Journal of Economic Policy in Emerging Economies, 2011 Vol.4 No.2, pp.197 - 210

Published online: 11 Jan 2015 *

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