DIASPORA AS A GENERATOR OF FOREIGN DIRECT INVESTMENT

Abstract

Focusing on Bosnia and Herzegovina, this study examines how diasporas contribute to the creation of foreign direct investment (FDI) in developing countries. It defines FDI as the acquirement over assets in a foreign nation and highlights how diaspora populations support investment flows. It also examines diaspora investment strategies, such as diaspora portfolio investment (DPI) and diaspora direct investment (DDI), and offers a historical overview of diaspora FDI patterns and how Bosnia and Herzegovina's policies are changing to engage its diaspora more.
One case study illustrates the impact of diaspora-led FDI by highlighting the success of Senad Šantić, a Bosnian entrepreneur who returned to his home country to start a tech company. While these investments support development and economic growth, there are still issues, like the possibility of putting one's own interests ahead of the interests of the economy as a whole. Particularly in Bosnia and Herzegovina, where diaspora participation has historically been low, the implementation of effective policies and procedures is crucial, especially from a regulation perspective.
The study also looks at the future of FDI, emphasizing the part that digital technology and new investment patterns will play. Opportunities for developing nations can be found in digital FDI, especially in industries like fintech and e-commerce, yet obstacles still exist in luring these investments. According to all the findings, developing nations can improve their chances for economic success by creating an atmosphere that encourages diaspora investment which will shift those nations into the global investment scene. Ultimately, FDI regulations and government programs are needed in order to fully utilize diaspora-led FDI for sustained growth.