SELLING OF ENTERPRISES IN SERBIA AS A FORM OF FOREIGN INVESTMENT

Abstract

In a global economy, foreign direct investments are the most important form of international business activities. Statistical analysis based on bilateral flows of foreign direct investments as well as the specific features of the countries, confirmed the importance of the "gravity" variables in attracting foreign investments. Therefore, the author of this article attempts to further elaborate on what determines the interdependence of business decisions on investment location and incentives for investment. The fact is that many post-communist countries have decided to embark on a radical journey to transform the economy, often with very rapid and bad privatizations of companies. This "economic shock therapy" has largely resulted in the reduction of GDP, a significant reduction in living standards and many other categories. In other words, the concept of development of the countries in transition is focused on the establishment of an attractive environment for capital imports, although the scope and structure of these investments in most cases leads to deindustrialization, which, along with privatization of banks has contributed to the process of excessive consumption of the population, with the highest spending oriented towards imports, increasing foreign trade deficit.