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FDI in Montenegro

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Foreign Direct Investment in the Successor States of Yugoslavia

Part of the book series: Economic Geography ((ECOGEO))

Abstract

Like its Western Balkan neighbors following the destructive events of the 1990s, Montenegro has engaged in political, economic, and social rehabilitation. With the outset of the new millennium, worldwide expansionary monetary conditions fueled international liquidity, boosting asset markets and directing capital flows toward emerging markets, including those in the Balkans. Within this new favorable external environment, Montenegro opened up its economy, deepened its EU orientation, underwent large-scale privatization, and began creating a more attractive environment for foreign direct investment (FDI). The ensuing significant increase of capital inflows had positive effects on Montenegro’s economic and political environment. Driven by privatization, investments were mainly oriented toward the service sectors (banking, telecommunication, and real state) rather than primary and manufacturing sectors. The first effects of direct capital inflow have been positive, leading to high growth rates, low inflation, increased employment rates, and stability in Montenegro’s fiscal balance. In the wake of the financial crisis, inflows of FDI to Montenegro became significantly lower. Since its recovery, the country has experienced a new wave of investments from origin countries different than before. These have been characterized by various industrial structures and directed toward a previously underutilized set of locations.

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Notes

  1. 1.

    https://www.mipa.co.me/.

  2. 2.

    As of November 2019, 32 chapters of negotiation have been opened, with three provisionaly closed.

Abbreviations

CBCG:

Central Bank of Montenegro

CCCC:

China Communications Construction Company

CEE:

Central and Eastern Europe

CEFTA:

Central European Free Trade Agreement

CGES:

Montenegrin Electric Transmission System

CRBC:

China Road and Bridge Corporation

ECM:

Electric Company of Montenegro

EFTA:

European Free Trade Agreement

EU:

European Union

FDI:

Foreign Direct Investment

FRY:

Federal Republic of Yugoslavia

GCI:

Global Competitiveness Index

GDP:

Gross Domestic Product

GFC:

Global Financial Crisis

JV:

Joint Venture

MNE:

Multinational Enterprise

MVP:

Massive Voucher Privatization

OBOR:

One Belt One Road

OLI:

Origins-Location-Internalization

SFRY:

Socialist Federal Republic of Yugoslavia

SMEs:

Small and Medium-Sized Enterprises

UAE:

United Arab Emirates

UK:

United Kingdom

US:

United States

WB:

Western Balkans

WIIW:

Vienna Institute for International Economic Studies

WOS:

Wholly Owned Subsidiary

WWII:

World War II

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Authors and Affiliations

  1. Faculty of Economics, University of Montenegro, Podgorica, Montenegro

    Danijela Jaćimović & Sunčica Rogić

  2. Central Bank of Montenegro, Podgorica, Montenegro

    Maja Ivanović

Authors
  1. Danijela Jaćimović
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  2. Maja Ivanović
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  3. Sunčica Rogić
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Correspondence to Danijela Jaćimović .

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  1. Global Studies Department, Bentley University, Waltham, MA, USA

    Joel I. Deichmann

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Jaćimović, D., Ivanović, M., Rogić, S. (2021). FDI in Montenegro. In: Deichmann, J.I. (eds) Foreign Direct Investment in the Successor States of Yugoslavia. Economic Geography. Springer, Cham. https://doi.org/10.1007/978-3-030-55739-3_7

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  • DOI: https://doi.org/10.1007/978-3-030-55739-3_7

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