ANALYSIS OF FOREIGN DIRECT INVESTMENT INFLOW IN BOSNIA AND HERZEGOVINA

Abstract

This paper is to present the income and effects evoked by the investment of foreign direct investments in Bosnia and Herzegovina during the period of two years – from 2007 to 2009. This particular period is identified as the most successful in view of foreign investments in Bosnia and Herzegovina. This period is actually the point of realization of the greatest direct foreign investment in Bosnia and Herzegovina – selling „Telekomunikacije Republike Srpske“company. It is necessary to have foreign direct investments intended for countries in transition, like Bosnia and Herzegovina, especially because these countries are facing pertaining chronic lack of capital. Along with the capital invested, the foreign investors are also bringing modern technological solutions and new managing and marketing – related skills, which presents the basis for productivity growth. This paper actually shows the positive effects of foreign investors’ coming to Bosnia and Herzegovina, especially relating to the plan of export and competitiveness, which are all, without any doubt – positive. It also proves that, due to the unfavorable climate for investments, Bosnia and Herzegovina was given much less foreign direct investments than other neighboring countries – Croatia and Serbia.