Handbook on Small Nations in the Global Economy
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Handbook on Small Nations in the Global Economy

The Contribution of Multinational Enterprises to National Economic Success

Edited by Daniel Van Den Bulcke, Alain Verbeke and Wenlong Yuan

This unique, extensive Handbook illustrates that multinational enterprises can contribute substantially to the competitive advantage of small countries. It advances the notion that small nations increasingly need to rely on both home-grown and foreign multinational enterprises to achieve domestic economic success in industries characterized by international competition.
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Chapter 5: Upgrading the International Competitiveness of a Transition Economy: Slovenia in the European and Global Economy

Andreja Jaklic, Matija Rojec and Marjan Svetlicic


Andreja Jaklič, Matija Rojec and Marjan Svetličič Slovenia is a small economy that has almost accomplished the transition process and entered the EU (2004). With per capita GDP of €12 319 GDP in 2003 (€16 400 at purchasing power parity (PPP); IMAD, 2004) it is also the most developed among the new EU member states from Central Europe. With fewer than 2 million inhabitants, Slovenia could not survive without being an open, outward-oriented economy. Internationalization of operations is a critical factor for creating competitive firms and a strong economy. Traditionally the pattern of Slovenia’s internationalization has been characterized by strong foreign trade and low FDI (foreign direct investment) penetration of the economy. The share of exports or imports in GDP is close to 60 per cent, while FDI inflows are only 3.5 per cent and the share of FDI outflows just 1.1 per cent. To put it into international perspective, in 2001, the share of trade in goods in Slovenia’s GDP was 103.1 per cent, while the respective share for high-income countries was 37.9 per cent and 56.3 per cent for countries belonging to the European Monetary Union (EMU). The share of gross FDI in Slovenia’s GDP was 3.8 per cent, while the respective share for high income countries was 5.3 per cent and for EMU countries 14.8 per cent (World Bank, 2003, p. 312). Slovenia’s share in world trade flows is thus much higher than in world FDI stock and GDP. In these respects the Slovenian economy is...

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