Foreign Direct Investment and Backward Spillovers in the Western Balkans

Abstract This article investigates how regional supply chains support the Western Balkans’ economic growth. It first identifies role of cefta free trade agreement in expanding size local market and opening up trading opportunities. recounts larger specific industrial policies have attracted foreign direct investment ( fdi ) to region recent years. analyses these two factors combined generate export-led growth brought about substantial structural changes within economies. The argues that take continued advantage success liberalisation attraction, policymakers should pay special attention promoting backward spillovers by linkages between small middle sized enterprise sme supplier firms newly arrived multi national corporations embedded into global value chains. Policies be adopted which build capacity suppliers chains, both terms labour force skills technological upgrades. EU’s recently launched Economic Investment Plan for Balkans activities Balkan Six Chamber Forum may such policies.