FOREIGN DIRECT INVESTMENT AS INDICATOR REGIONAL IMBALANCES IN SERBIA AND POSSIBILITIES OF THEIR EFFECTIVE ALLOCATION

It has been known that our country does not possess sufficient resources to finance economic growth and development and reduce regional disparities, and the aforementioned forced it to use foreign funds, which take over the function of the main drivers and key development factors, not only in individual national economies, but also the entire world economy. The global financial crisis has affected, among other things, the decline in foreign direct investment as well as the increase of regional differences, both at global and lower regional levels. For all countries in transition, including Serbia, in addition to the problem of how to attract a larger volume of foreign investment, there is the question (problem) their efficient allocation, both within and between regions. By increasing inflows of foreign direct investments and their efficient allocation by region, Serbia may improve its competitive position and thus reduce regional disparities, which are by all indicators, among the highest in Europe. The main objective of this study is to investigate the geographical distribution of FDI by region in Serbia, emphasize the need for engagement of all the subjective forces of the country in order to create a favorable investment environment and to propose specific actions and measures to attract foreign investment as much as possible, which are then supposed to be evenly distributed.

Key words: Foreign direct investment, financing of economic growth and development, regional disparities, national economy, the global financial crisis, countries in transition, the investment climate.

JEL Classification: F21