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Abstract
Emerging economies today offer a great research opportunity, not only for testing existing theoretical models of internationalisation but also for building new models of internationalisation and sustainable development. Transition economies serve as a kind of lab for implementation of different strategies of accelerated internationalisation. The lessons to be learned from the developments in Slovenia may challenge theoretical frameworks related to foreign direct investment (FDI) and development. We present Slovenian’s experience with internationalisation through FDI by highlighting the dynamics of FDI activity and development implications, including the role played by large and small enterprises, the changes in internationalisation models and conclusions.
Disclosure statement
The authors report no conflicts of interest. The authors alone are responsible for the content and writing of this article.
Notes
Notes
1 PHARE-ACE research project P98-1162-R; EU-integration-driven investment networking: Outward foreign direct investmentFDI of candidate countries (2001–2002), The emerging industrial architecture of the wider Europe project (University College London, 2001–2002), Outward and inward FDI in Slovenia (Ministry of eEconomy) 2005–2008, Internationalizsation through FDI after crisis (Ministry of Economy, 2008–2012).
2 Slovenian enterprises directly invested abroad already in the socialist times, before inward FDI were allowed in 1967. According to motivation, these investments were called system escape investments (more in Jaklič & Svetličič, Citation2003).
3 The majority of the largest Slovenian MNEs still performed positively in 2008 and 2009, but realizsed lower sales (e.g. Merkur, Trimo, Gorenje and Prevent; all of them among the top Slovenian MNEs). The crisis hit consumers later; the marketing monitor survey showed their highest (almost 80%) perception of being hit by the crisis and a drop in purchasing power only in 2012. Slovenia recorded the second deepest decline in GDP in the OECD in 2009 (behind Estonia) and was expected to grow modestly in 2010–2012. OECD, Economic Surveys of Slovenia (Paris, 2011), p. 2.
4 Slovenian way of privatizsation scheme differs from dominant model in CEE. While other CEE rely more on capital markets, Slovenia rely more on managerial capital and debt.
5 The annual rankings of the Ttop Slovenian MNEs since 2007 showed that some companies fell off the list either due to a takeover by foreign partners or due to lack of dynamics in their development. Most firms went off the list as a result of bad governance, political interference, poor management, manipulated leveraged management buyouts, pre-crisis stagnation and too slow or lack of restructuring. (Jaklič & Svetličič, Citation2011, pp. 130–148).
6 Bank of Slovenia, Direct Investment, 2011, 2012.
7 The share of foreign investors estimating a decline in the attractiveness of Slovenia as an investment location has been rising since 2008. Over 73% of foreign affiliates said in 2012 the conditions in Slovenia have deteriorated and almost 84% in 2013 (Rojec & Jaklič, Citation2013).
8 The patterns of internationalisation and relocation were diverse and as a rule did not take place through FDI. EU integration enabled (more) free movement of capital and labour, so many SMEs and individual entrepreneurs transferred their operations abroad.
9 Latvia, Lithuania, Czech Republic, Poland and Estonia.
10 Available at www.doingbusiness.org
11 Available at http://www.heritage.org/index/country/slovenia
12 Favourable public opinion towards liberalisation attracts FDI inflows and vice versa.
13 The extent of linkages and consequently the extent of spillovers from foreign affiliates to domestic firms are determined by market size, local content regulations and the size and technological capacity of domestic firms. With limited market size, Slovenia can only rely on the growth of the skill and technology level of local suppliers and local content.
14 Bank of Slovenia, Direct Investment, 2013.
15 See Community innovation survey run by Statistical Office of the Republic of Slovenia.
16 Conducted by the Centre of International Relations since 2007 and covering the period after the accession to the EU.
17 Bank of Slovenia, Direct investment, 2013.
18 Financial support, tax reliefs and support with labour mobility were the most appreciated incentives, according to surveys.
19 The share and impact of SMEs increased rapidly over the last 15 years. In 2000, the share of SMEs among all direct investors abroad represent 69% per cent, in 2005 already 78% per cent and in 2010 SMEs represent over 80% per cent. The process is a result of both: a wave of new entrants due to SMEs that started to operate internationally and growth of existing already internationalizsed firms.
20 The analysis of case studies demostrated a strategy of '»internationaliszation at home'« by using international community in home market as a new market segment (see Jaklič & Karageorgu, Citation2015).