Privatization in the Republic of Serbia

Following the dissolution of the Socialist Federal Republic of Yugoslavia in the early 1990s and the subsequent pursuit of European integration, the Republic of Serbia faces the challenge of swift economic transition. Privatization of state owned enterprises (SOEs) is key and has been a sensitive and recurring issue in the country. Anno 2015, Vucic’s large scale transition program is expected to increase the influx of foreign direct investment (FDI) through privatization and in theory FDI is believed to have a positive effect on its recipient. By drawing on data from 14 semi-structured interviews, this study examines the potential advantages of privatization through foreign direct investment (FDI) as compared to privatization through domestic investment in Serbia. It describes the underlying theory of FDI and its effects on a recipient economy.