Abstract
Research background: Foreign direct investment is perceived as a valuable tool for economic growth. The growth could be realized more or less as a set of benefits depending on the FDIs features. In the period from 2009 to 2016 a remarkable increase in the share of FDIs inflow in automotive sector in Macedonian economy was noticed, from 2.8% to 14.1%. Thus, there seem to be good reasons to examine the issue of how the increased FDI inflow expressed through the remarkable in-crease of FDIs inflow in the automotive sector.
 Purpose of the article: The aim of the paper is to analyze the causality between the increased FDIs inflow in the automotive industry and a remarkable export growth. The research interest of the study is to recognize the importance of the FDIs inflow structure as a determinant of the export structure.
 Methods: Within the paper a model is developed that identifies the FDIs as a factor of growth of the export performances. A regression analysis is used to examine the correlation between the FDIs inflow and export. In order to examine causality, the Granger causality test is applied between the FDIs inflow and increased export.
 Findings & Value added: The results suggest that FDIs create a good basis for quantitative and qualitative shift in the export structure of the Macedonian economy. The paper associates growth of sectoral export with the growth of FDIs in that sector. Due to the increased FDI inflow in the automotive industry, this sector has significantly increased its share in the total Macedonian export. The paper indicates that FDIs can be considered as a way of engagement in the global supplying chains, which additionally influences positively the competitiveness and export performance of the host suppliers.
Highlights
Foreign direct investments (FDIs) could be considered as a factor of development for both developed and developing countries
Findings & Value added: The results suggest that FDIs create a good basis for quantitative and qualitative shift in the export structure of the Macedonian economy
Particular attention is paid to the global supplying chains that could be seen as platforms that enable a host economy to become a part of the FDIs supplying chains and to expand the market access
Summary
Foreign direct investments (FDIs) could be considered as a factor of development for both developed and developing countries. FDIs and their effects to the host economy are issues of continual theoretical and empirical interest within the scientific and research community on the one hand, and on the other, they can be recognized as a useful tool for developing a strategy for an economy. The research interest could be directed to the quantitative and qualitative aspects of FDIs and their interactions with the host environment through founding production facilities, hiring and training workers, establishing linkages with local suppliers and influence on the export performances of the local economy. The FDIs are potentially seen as a source of important productivity externalities for the host economies. The directions and benefits of the FDIs to the host economy depend largely on the structure, local policies, as well the level of development
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