PROMJENA NIVOA STRANIH DIREKTNIH ULAGANJA I STRUKTURE KAPITALA ULAGAČA
CHANGE IN THE LEVEL OF FOREIGN DIRECT INVESTMENTS AND CAPITAL STRUCTURE

Summary/Abstract: As for all developing and transitional economies, it is also important for Bosnia and Herzegovina (B&H), to use all of its developing potentials. Accordingly, foreign direct investments (FDI) are among key factors for achieving sustainable economic growth. Providing favourable investment climate for attracting foreign direct investments becomes one of the most important goals of economic policy. Foreign investors situated in B&H, incuding other factors, also contribute to general investment climate. Studies show that foreign investors when making their investment decision rely on financial reports of foreign investors in host country. The aim of this paper is to explore the relationship among changes in binding capital and aggregate FDI inflows. Results obtained indicate that there is a positive correlation between FDI growth in a year (2010) and stock level in previous year (2009). It is observed that relationship between variables degenerate during recession.

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