Vol.6, No 1, 2009 pp. 9 - 22
UDC 339.22 (497.11)
COUNTRY RISK AND EFFECTS OF FOREIGN DIRECT INVESTMENT
Evica Petrović, Jelena Stanković
Faculty of Economics Niš, Trg Kralja Aleksandra Ujedinitelja 11, 18000 Niš, Serbia
evica@eknfak.ni.ac.rs
This paper presents interconnection between risk and effects of foreign direct investment (FDI) on the domestic and foreign company with a special focus on the companies from the Republic of Serbia. Number of environment risks significant for making investment decisions of multinational corporations is significantly increased in the globalization process. Before making decisions about foreign investment, multinational companies tend to anticipate all potential risks, which may occur in the host country. Country risk, as one of the most important risks, occurs in the following two forms: risk of sovereignty and transfer/convertibility risk. Regarding the influence of country risk on the incomes of one cross-border investment, it has to be really evaluated. Numerous methods can be applied in measurement of country risk premium. The spread of potential effects, direct and indirect, from FDI is wide and affects both investors and domestic country. Presented data shows Serbia's participation in total world FDI inflow during the period 2000-2007, and also Serbia's participation in comparison to the FDI inflow of some European countries and former Yugoslav republics. The final part of the paper presents the relationship between risk and return on investment, as well as creating cross-border investment portfolio as an instrument for risk reducing.
Key Words: Country risk, foreign direct investment, methods of country risk premium measurement, return on investment.
RIZIK ZEMLJE I EFEKTI STRANIH DIREKTNIH INVESTICIJA
Namera ovog rada je da ukaže na međuzavisnost rizika i efekata stranih direktnih investicija (SDI) na preduzeće zemlje domaćina i strano preduzeće uz poseban osvrt na preduzeća Republike Srbije. Broj rizika od značaja za donošenje investicione odluke multinacionalnih kompanija koji potiču iz okruženja je značajno povećan tokom procesa globalizacije. Multinacionalne kompanije nastoje da, pre donošenja odluke o međunarodnom investiranju, predvide sve potencijalne rizike sa kojima se mogu suočiti u zemlji domaćinu. Rizik zemlje, kao jedan od najvažnijih rizika, javlja se u dve forme: rizik suverenosti i rizik transfera/konvertibilnosti. S obzirom da rizik zemlje može imati veliki uticaj na prinos koji će odbaciti jedna međunarodna investicija, on se mora realno oceniti. Za merenje premije rizika zemlje moguće je koristiti veći broj metoda. Raspon direktnih i indirektnih potencijalnih efekata stranih ulaganja je ogroman i efekti su obostrani, i na investitora i na zemlju domaćina. Podaci pokazuju učešće Srbije u ukupnom svetskom prilivu SDI u periodu 2000 – 2007. kao i poređenje priliva SDI Srbije i nekih evropskih i bivših jugoslovenskih zemalja. U poslednjem delu rada prikazana je međuzavisnost rizika i prinosa na investiciju, kao i kreiranje međunarodnog investicionog portfolia kao instrumenta za smanjenje rizika.
Ključne reči: Rizik zemlje, strane direktne investicije, metodi za merenje premije rizika zemlje, prinos na investiciju