Abstract
The aim of Greek multinationals to achieve a leading role in the Balkans is evident from the share of Greece’s FDI abroad—approximately one third—accumulated by the Balkan economies. However, the escalation of the sovereign debt crisis has led to major cutbacks in the activities of foreign affiliates as a means of cost reduction and to the sale of foreign affiliates by Greek multinationals to buttress parent enterprises. These developments not only threaten the competitiveness of Greek multinationals but also jeopardise the ultimate aim of attaining a leading role. As long as the Greek economy does not recover, Greek multinationals will aim at generating a part of their total annual profits from foreign affiliates only to the extent permitted by liquidity constraints and cost reductions.
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Notes
- 1.
Based on the authors’ calculations from Eurostat data on GDP in purchasing power standards. Available at http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database (accessed 20 August 2012).
- 2.
See Schneider, Buehn, and Montenegro (2010) for relative figures on the size and determinants of the shadow economy.
- 3.
The Balkans include Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the FYR of Macedonia, Moldova, Montenegro, Romania, Serbia, and Slovenia.
- 4.
This ranking is based on the authors’ calculations from Eurostat data on outward FDI stock and GDP. http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database (accessed 20 August 2012).
- 5.
The leading role of Greek MNEs in SEE is put forward by Bitzenis and Vlachos (2011), who indicate that Greece accounts for a considerable share of the inward FDI stocks of several countries in SEE.
- 6.
See Eurostat database theme ‘EU direct investment positions, breakdown by country and economic activity’. http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database (accessed 20 August 2012).
- 7.
Table 1 indicates that a considerable sum of net outward FDI flows in 2011 was destined to Poland and the UK. While Poland’s recent FDI attractiveness is indicated by its very high global rankings according to FDI Intelligence (see http://en.poland.gov.pl/FDI,Intelligence,highly,of,Polish,investment,capacity,13463.html, accessed 20 August 2012), the UK has been regarded by Greek direct investors as an alternative to the sovereign debt crisis.
- 8.
A number of reports for several industries about the motives for and barriers to internationalisation—undertaken by the Federation of Industries of Northern Greece in 2008 (titles in Greek are available online at: http://www.sbbe.gr/m2/m2_3.asp, accessed 20 August 2012)—indicate that Greek enterprises with internationalised activities are more competitive and have a competitive advantage over Greek enterprises that do not engage in international business.
- 9.
The reader should refer to the value chain framework for an overview of both primary and supporting value-adding activities (see Porter, 1985, 11–15).
- 10.
In line with the allocation of labour-intensive activities to low-wage countries, the larger volumes of employment in affiliates located in less developed countries are associated with lower labour intensity at home (Mariotti, Mutinelli, & Piscitello, 2003).
- 11.
In another relatively recent study, the unidirectional relationship between GDP and outward FDI was shown to be true only in the long run (Lee, 2010).
- 12.
A certain amount of Greece’s outward FDI in Cyprus is actually transferred to the Balkans (Bitzenis & Vlachos, 2011).
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© 2013 Konstantinos Karamanlis Institute for Democracy, Athens
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Bitzenis, A.P., Vlachos, V.A. (2013). Greece’s Outward FDI: A Window for Growth?. In: Sklias, P., Tzifakis, N. (eds) Greece's Horizons. The Konstantinos Karamanlis Institute for Democracy Series on European and International Affairs. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-34534-0_20
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