FOREIGN DIRECT INVESTMENT AND THEIR CHARACTERISTICS IN BOSNIA AND HERZEGOVINA

Abstract

Foreign investment is a key factor in the development of a modern economy, the trade, the most important means of enterprise business, the organization of production, supply of goods and services worldwide. Through foreign investment, companies organize production on a global scale, provide an efficient supply of raw materials, energy, labor, and then sell their products and services in the most important markets in a profitable way. Based on such a business, companies can optimally utilize its advantages in technology, knowledge, and economies of scale. Developing countries due to debt and unfavorable economic conditions are showing interest in foreign investment, especially when various loans and financial help stop arriving. Transition countries integrate into the world economic system, negative economic tendencies can be overcome by international capital movements. Developed countries faced to a financial crisis, are also interested in the sizeable input of foreign capital, where foreign investment becomes the most important element of development strategies. This work gives special attention to the input of foreign direct investments and their effects in Bosnia and Herzegovina.

Keywords

• FDI
• Bosnia and Herzegovina
• economic development
• effects and features.