The Experience of Bulgaria in Attracting Foreign Direct Investment — Lessons for Emerging Economies1
опыт Болгарии в привлечении прямых иностранных инвестиций: уроки для стран с развивающимися рынками
Zhelev P.N. Kussainova A.A.
2024Institute of Economics, Ural Branch of the Russian Academy of Sciences
Economy of Regions
2024#20Issue 1305 - 320 pp.
Foreign direct investment (FDI) has been crucial in transitioning Central and Eastern European countries from planned to market economies, facilitating technological modernisation, job creation, export performance, and regional competitiveness. However, FDI alone cannot solve economic development challenges; effective policies are essential for leveraging FDI as a catalyst for economic catch-up. This paper aims to derive economic policy lessons for emerging economies through a critical assessment of the Bulgarian experience in attracting FDI. It employs a methodological approach that combines quantitative analysis of key FDI indicators with qualitative evaluation of the policy landscape. Since the end of the 1990s, Bulgaria has secured macroeconomic and political stability as an important precondition for FDI, applying an open-door policy for foreign investors without strategic targeting. The countrys accession to the European Union in 2007 further enhanced its investment appeal. Nevertheless, the passive policy of reliance on a low tax regime and low labour costs without a strategic focus has led to unbalanced regional and unfavourable sectoral distribution with foreign investors crowding into the metropolitan area and sectors like non-tradable services and low-end manufacturing. Thereby, the Bulgarian experience, where the quantity of incoming FDI overshadowed the quality, demonstrates the insufficiency of a laissez-faire FDI strategy for maximising the benefits of FDI. The study underscores the necessity for proactive state policies in emerging economies that not only attract FDI but also ensure it fosters technological transfer and stimulates the economic potential of underdeveloped regions.
catching-up development , competitiveness , FDI policy , foreign direct investment , incentives , industrial zones , regional development
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University of National and World Economy, Sofia, Bulgaria
Ualikhanov University, Kokshetau, Kazakhstan
University of National and World Economy
Ualikhanov University
10 лет помогаем публиковать статьи Международный издатель
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