FOREIGN DIRECT INVESTMENT IN SOUTH EASTERN EUROPE – INFORMATION TECHNOLOGY INDUSTRY BASED ECONOMIC DEVELOPMENT STRATEGIES: THE CASE OF THE REPUBLIC OF MACEDONIA
Date Issued
2011
Date
2011
Author(s)
Dimoska, Sonja
Abstract
This paper explores investment opportunities in the Macedonian information technology (IT) industry and proposes such investment as a valid future development strategy for the country’s economy. The paper’s theoretical background is expanded from wider research of foreign direct investment (FDI) determinants in South Eastern Europe and specific industry related parameters. Additionally, regional IT market conditions are explored in order to provide a clear idea of profitability factors. Significantly, FDI directed at the countries of South Eastern Europe is on the rise: the Western Balkans in particular is improving its economic situation and featuring evermore prominently in the consciousness of investors. Moreover, the multiple regional accession processes to the EU are sending a positive signal to the world’s business community about the reduction in local political and economic risks/the improving legislative framework in Balkan countries. Having demonstrated an excellent performance in terms of macroeconomic stability, Macedonia - with its auspicious location in the center of South Eastern Europe - gains advantages based on its extremely attractive governmental incentives and strong current/prospective market indicators. Its attractive knowledge base and competitive wages set within the framework of existing IT development form a cost-effective solution to IT investor needs, especially when compared to Central Eastern European countries. The proximity to a huge regional IT market with high forecasted growth rates also offers significant long term opportunities for IT companies, whilst the regional cultural, linguistic and consumer similarities further ease market-entry concerns. Once elaborated upon, Macedonia’s specific conditions combined with the optimistic prognosis for South Eastern Europe’s future as a whole allow realistic prospective investment opportunities to be identified. In consideration of the high concentration of Taiwanese IT companies in the Czech Republic, a brief Macedonia/Czech Republic investigation is executed to allow the reader a point of reference and comparison between the two companies. This enables a clearer understanding of the advantages that lie in investing in South Eastern Europe, particularly in terms of cost reduction. With regard to the conclusion, recommendations for the improvement of different aspects that directly affect investments in the IT industry are provided.
Subjects
Foreign Direct Investments
Information Technology
South Eastern Europe
The Republic of Macedonia
development strategy
Type
thesis
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