IMPACT OF FOREIGN DIRECT INVESTMENT ON COMPETITIVENESS OF MONTENEGRIN ECONOMY

The present paper is based on the research conducted by the authors on the impact of foreign direct investments on the competitiveness of Montenegrin economy in the period of 2007-2015. It is based on two research hypotheses. The first one is that the competitiveness of national economy significantly depends on the level of FDI. The second hypothesis is that the transition to a market economy approach in the period of 2007-2015 has reflected on the increased inflow of FDI, improving the ranking of Montenegro in the competitiveness reports issued by the World Economic Forum. The authors have placed their research focus on a theoretical analysis of the impact of FDI on the level of national competitiveness, as well as on an in-depth analysis of the ranking of Montenegro in the competitiveness reports. According to the authors, the transition in Montenegro has been hampered for years, by a number of factors. However, at the beginning of the new millennium, market economy based on the rule of law and stable institutions has started to be built irrevocably. All of the above has affected the inflow of FBI and increased the level of competitiveness of the national economy. Hence, the paper aims to identify the extent to which FDI inflow in the observed period influenced the ranking of Montenegro in the competitiveness reports of the World Economic Forum.