FOREIGN DIRECT INVESTMENT IMPACT ON MARKET CONCENTRATION IN THE MANUFACTURING SECTOR OF BOSNIA AND HERZEGOVINA

Radovan Kastratović

DOI Number
https://doi.org/10.22190/FUEO1802135K
First page
135
Last page
148

Abstract


There is no consensus regarding the effect of foreign direct investment on market concentration in the literature of foreign direct investment and the theory of industrial organization. The aim of the research is to empirically investigate this impact in the context of the manufacturing sector of Bosnia and Herzegovina. To achieve this aim we estimate the econometric model by applying ordinary least square method. The sample of 21 industries comprising manufacturing sector of Bosnia and Herzegovina was used for model estimation. Cross-sectional sample data was obtained from the Central Bank of Bosnia and Herzegovina and the financial reports of 4924 companies registered in the aforementioned industries for the year 2016. The results suggest that the impact of foreign direct investment on market concentration can best be described with a convex function.


Keywords

foreign direct investment, market concentration, competition

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References


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DOI: https://doi.org/10.22190/FUEO1802135K

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