What Drives Cross-Border Mergers and Acquisitions and Greenfield Foreign Direct Investment Capital Flows? Reconsideration in the Case of the Selected Former Yugoslav Countries

Ksenija Denčić-Mihajlov; Vinko Lepojević; Jovana Stojanović

doi:10.5755/j01.ee.32.3.27440

Authors

Ksenija Denčić-Mihajlov University of Nis, Republic of Serbia
Vinko Lepojević University of Nis, Republic of Serbia
Jovana Stojanović University of Nis, Republic of Serbia

DOI:

https://doi.org/10.5755/j01.ee.32.3.27440

Keywords:

Foreign Direct Investments, Cross-Border Mergers and Acquisitions, Greenfield Foreign Direct Investments, Macroeconomic Determinants, Panel Data Method, Random-Effects Model

Abstract

Bearing in mind the different nature and the impact of various types of foreign direct investments (FDI) on the one hand, and the specific macroeconomic environment in the post-socialist countries on the other hand, in this paper we reexamine the selected macroeconomic factors that affect the two types of FDI inflows (cross-border mergers and acquisitions and greenfield FDI) in four countries of the former Socialist Federal Republic of Yugoslavia. The study employs the balanced panel data framework and covers twelve-year period (2006-2017). Having performed the Hausman test, we use the random effect model and provide evidence that: (1) the key FDI macroeconomic determinants in stable business conditions, examined in numerous research studies, can have a different impact on FDI in times characterized by unstability and financial crisis, (2) some determinants of FDI inflows have different importance and direction in the case of cross-border M&A and greenfield FDI. Our findings are relevant for policymakers who should reconsider the key factors that fuel the FDI inflows towards their developing economies.

Author Biographies

Ksenija Denčić-Mihajlov, University of Nis, Republic of Serbia

Ksenija Denčić-Mihajlov is a Full Professor at the Faculty of Economics, University of Niš, Republic of Serbia. Besides teaching Business Finance and International Business Finance according to accredited program of undergraduate studies, she is a professor in Strategic Financial Management and Business and Financial Restructuring at master level and Financial Strategy of Corporate Companies at graduate level. Her key areas of scientific research interest are sustainable finance and socially responsible investment, corporate financing and restructuring.

Vinko Lepojević, University of Nis, Republic of Serbia

Vinko Lepojević is a Full Professor of Statistics at Faculty of Economics, University of Niš, Republic of Serbia. He holds a MS degree in Statistics from Faculty of Economics, Belgrade University, and PhD from Faculty of Economics, University of Niš, Republic of Serbia. His research interests are application of mathematical and statistical methods in economic research and the application of statistical methods in market research. His research works have been published in international journals and also in the highly regarded national journals.

Jovana Stojanović, University of Nis, Republic of Serbia

Jovana Stojanović is a PhD student in the Department of Accounting at the Faculty of Economics, University of Niš, Republic of Serbia. She is currently a junior researcher at the Innovation Center, University of Niš and non-employment associate in International Business Finance, Management Accounting and Cost Accounting at the Faculty of Economics. Her research interests are in the areas of accounting, financial reporting, auditing and financial management.