Abstract
Yugoslavia’s post-1965 economic policies have been directed towards opening the economy to foreign trade and encouraging inward investment in Joint Ventures. This research examines the opportunities and constraints facing Western multinational companies which invest in Joint Ventures in Yugoslav industry. The empirical evidence drawn from a sample of 42 West European and North American companies addresses itself to the formation and success of Joint Ventures, the route to foreign direct investment in Yugoslavia and motives and preferences for Joint Ventures to other forms of industrial cooperation.
This chapter is based on an empirical study of Western European and North American multinational companies which have invested in Yugoslav industry between 1968 and 1980. The first section examines the advantages and drawbacks of Yugoslavia as a host country for such ventures. The second section analyses the nature and overall pattern of Joint Ventures in Yugoslav industry, and the third section summarises the legal regulations governing such ventures. The fourth section summarises a detailed empirical analysis of 42 Joint Ventures, concentrating on their location decision, the degree of successful operation achieved, the foreign entrant’s pre-Joint Venture dealings with Yugoslavia and the motives behind the decision to implement a Joint Venture.
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Notes
Schrenk, M., C. Ardalan, and N. Tatawy, Yugoslavia: Self-Management Socialism. A World Bank Country Economic Report. (Baltimore: The Johns Hopkins Press, 1979), pp. 244–85.
The absence of superior profits among the motives of firms investing overseas has also been reported by A. M. Mathew, ‘Recent Direct Investment in Australia by First Time U.S. Investors’ (unpublished PhD Thesis, University of Bradford, 1979, p. 136), who also quotes the findings of D. T. Brash, American Investment in Australian Industry, Harvard University Press, Cambridge, MA, 1966, p. 40,
B. L. Johns, ‘Private Overseas Investment in Australia: Profitability and Motivations’, The Economic Record, Vol. 43, no. 102, June 1967, 233–6.
Newbould, G. D., P. J. Buckley, and J. Thurwell, Going International, The Experience of Smaller Companies Overseas (London: Associated Business Press, 1978), pp. 26–9.
For details, see P. F. R. Artisien, ‘Joint Ventures in Yugoslav Industry’, PhD Thesis, University of Bradford, 1982, pp. 80–90; a revised version was published as
P. F. R. Artisien, Joint Ventures in Yugoslav Industry, (Gower: Aldershot and Brookfield, Vermont, 1985.
See also P. F. Cory, ‘Industrial Cooperation, Joint Ventures and the MNE in Yugoslavia’, in A. Rugman (ed), New Theories of the Multinational Enterprise (London: Croom Helm, 1982).
Artisien, P. F. R., ‘Belgrade’s closer links with Brussels’, The World Today, Vol. 37, no. 1, January 1981, 29–38.
This concurs with the findings of P. Killing, ‘Technology Acquisition: Licence Agreement v. Joint Venture’, Columbia Journal of World Business, Vol. XV, no. 3, Fall 1980; United Nations Economic Commission for Europe, Promotion of Trade through Industrial Cooperation: Results of an Inquiry. Trade R373, add. 2, 18 September 1978; and I. Fabinc, ‘Institutional Features of the Transfer of Technology in Yugoslavia’, Workshop of East-West Economic Interaction, Vienna Institute of Comparative Economic Studies, Baden, 3–7 April 1977.
In Root’s terminology, a company demonstrates an aggressive strategy when it ‘invests in a foreign country in order to exploit present and anticipated market opportunities more effectively than is possible through direct exports or other arrangements.’ Conversely, a defensive strategy is followed ‘when a primary motivation behind an investment is to hold on to a foreign market that can no longer be exploited by direct exports from the parent company’s country’. See F. R. Root, ‘U. S. Business Abroad and the Political Risks’, M. S. U. Business Topics, Vol. 16, no. 1, Winter 1968, 74.
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© 1992 Peter J. Buckley
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Artisien, P.F.R., Buckley, P.J. (1992). Joint Ventures in Yugoslavia: Opportunities and Constraints. In: Studies in International Business. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-12174-8_7
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DOI: https://doi.org/10.1007/978-1-349-12174-8_7
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