ANALYSIS OF FOREIGN DIRECT INVESTMENT INFLOW IN BOSNIA AND HERZEGOVINA

This paper is to present the incomeand effects evoked by the investment of foreigndirect investments in Bosnia and Herzegovinaduring the period of two years – from 2007 to 2009.This particular period is identified as the mostsuccessful in view of foreign investments in Bosniaand Herzegovina. This period is actually the pointof realization of the greatest direct foreigninvestment in Bosnia and Herzegovina – selling Telekomunikacije Republike Srpske“company. Itis necessary to have foreign direct investmentsintended for countries in transition, like Bosnia andHerzegovina, especially because these countriesare facing pertaining chronic lack of capital. Alongwith the capital invested, the foreign investors arealso bringing modern technological solutions andnew managing and marketing – related skills,which presents the basis for productivity growth.This paper actually shows the positive effects offoreign investors’ coming to Bosnia andHerzegovina, especially relating to the plan ofexport and competitiveness, which are all, withoutany doubt – positive. It also proves that, due to theunfavorable climate for investments, Bosnia andHerzegovina was given much less foreign directinvestments than other neighboring countries –Croatia and Serbia.