The Western Balkans is a politically fragmented subregion, possessing moderate levels natural resources, and lagging behind the rest of Europe in terms of income. Integration into the European Union offers the only feasible perspective to overcome deep-rooted divisions, and to speed up progress...

In the enlarged European Union (EU) with 25 members, the free movement of capital, coupled with the free movement of goods and services should be a major direct attraction for both intra-EU and external foreign direct investment (FDI) inflows. EU membership does not, however, lead to a linear...