Joint Ventures in Yugoslavia: Opportunities and Constraints
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Yugoslavia displays the features of an economy at an intermediate stage of development between a less developed country and an advanced industrialized economy. On the one hand, rapid industrialization and * Patrick F. R. Artisien (B.Sc., M.A., Ph.D.) is Research Fellow in International Business at the University of BradfordManagementCentre, U.K. He is the author of articles on Yugoslavia, Albania and Southern Europe and a book on Joint Venturesin YugoslavIndustry(Gower, Aldershot,and Brookfield,Vermont, 1985). ** Peter J. Buckley (B.A., M.A., Ph.D.) is Professorof ManagerialEconomics at the University of BradfordManagementCentre, U.K. He has written books and articles on the theory of multinational enterprises, the economics of international business strategyand of the world economy. Date Received: February 17, 1983; Revised: December 14, 1983/March 23, 1984; Accepted: May
3, 1984. 1ll
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JOURNAL OF INTERNATIONAL BUSINESS STUDIES, SPRING 1985
urbanization combined with a low population growth in the post-war period have resulted in marked improvements in living standards: between 1965 and 1979, the growth in Gross Domestic Product averaged 6% per annum. The ratio of investment to Gross Domestic Product at 28% per annum was higher than that of any O.E.C.D. country with the exception of Japan. As a result, Gross Domestic Product per capita reached a postwar peak of U.S. $3,034 in 1980. Growth in real incomes was accompanied by structural changes in the sectoral distribution of the labor force: between 1953 and 1978 labor moved from the predominantly privately-owned agriculturalsector to the social sector, dominated by industry and services. In this period, the share of the labor force employed in agriculture declined from 69% to 36.8%, while employment in industry and services rose respectively from 10.9% to 21.8% and from 20.1% to 41.4% of the working population. Labor also left the country at a steadily increasing rate in the 1960s. The World Bank estimated that the number of Yugoslav workers temporarily employed abroad had risen from 138,000 in 1964 to 1.1 million in 1973.1 Since 1974, however, a reduction of employment opportunities in Western Europe combined with the introduction of restrictive legislation governing the employment of foreign labor (particularly in West Germany and Switzerland) had resulted in more Yugoslav workers returning home than going abroad. The reduction in the outflow of labor has exacerbated Yugoslavia's domestic employment problem; in 1983 unemployment reached some 860,000 or 9%of the total labor force. Other key macro-economic indicators reveal a per capita Gross Domestic Product much below that of most O.E.C.D. countries, a persistently adverse balance of payments, growing indebtedness and severe regional disparities in living standards. This predicament, shared by many less developed countries, was exacerbated in Yugosla
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