50-61
FOREIGN CAPITAL, LABOR MARKETS AND EFFICIENCY EFFECTS. A CASE STUDY OF A SMALL OPEN ECONOMY
Authors: Mico APOSTOLOV
Number of views: 173
In Southeast Europe, as in most developing regions, governments offer significant incentives to attract inward
investment in expectation to narrow performance gaps between foreign and domestic firms. Hence, this is usually
motivated by the prospect of spillover benefits to augment the primary benefits of the national income from new
investment. This paper focuses on foreign direct investments and therefore foreign capital movements, labor
markets and potential efficiency effects, through a case study of Macedonia. Using macroeconomic and firm-level
data, we identify whether foreign ownership can bring about higher efficiency effects. By reviewing possible impact
of foreign direct investments induced efficiency effects, we develop comprehensive evaluation on probable
positive outcomes on enterprise restructuring due to change of ownership and corporate governance, shifts in
labor market and impact on gross domestic product. Further, results give indication that there are good grounds
for further developmen