Nearshoring Potential in the Western Balkans

Client/Funding Institution

Federal Ministry for Economic Cooperation and Development, Germany

Abstract

This study aims to analyse whether and how the Western Balkan economies could benefit from near-shoring trends after the COVID-19 pandemic. It begins by discussing recent trends in foreign investment, and then presents an econometric analysis of determinants of foreign direct investment in the Western Balkans and East Asia. This is followed by a set of surveys, interviews and case studies, of different actors involved in global supply chains and investment, including foreign companies that have invested in the Western Balkans, foreign companies that are considering investing in the Western Balkans, local companies from the Western Balkans, and investment promotion agencies from these economies. The study concludes that Western Balkan economies can indeed benefit from near-shoring trends in the post-pandemic world, but would have to go beyond low labour costs in order to achieve that. Putting a focus on skilled labour, investment in education and training, improving infrastructure and governance would be the most important things to do.

Duration

August 2020 - May 2021

wiiw team Leader

Branimir Jovanović

wiiw Staff

Alexandra Bykova, Mahdi Ghodsi, Richard Grieveson, Magdalena Höllhuber, Branimir Jovanović

Project Partners

The study was prepared in cooperation with the Union of Chambers of Commerce and Industry of Albania, the Foreign Trade Chamber of Commerce and Industry of Bosnia and Herzegovina, the Kosovo Chamber of Commerce, the Chamber of Economy of Montenegro, the Economic Chamber of Macedonia, the Chamber of Commerce and Industry of Serbia, the Western Balkans 6 Chamber Investment Forum, the Chamber Partnership Western Balkans, and Germany Trade and Invest. It was financially supported by the Federal Ministry for Economic Cooperation and Development (Germany).

Publications

Related News

Keywords: FDI, near-shoring, global value chains, Western Balkans, COVID-19

Countries covered: Balkan States

Research Areas: International Trade, Competitiveness and FDI

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