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Foreign Direct Investment in Central Europe Since 1990: An Econometric Study

Published online by Cambridge University Press:  26 March 2020

Melanie Lansbury ,
Nigel Pain  and
Katerina Smidkova
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Extract

It is widely recognised that foreign direct investment (FDI) may have an important role to play in the transformation of the formerly centrally planned economies of Central and Eastern Europe. FDI provides a vital source of investment for modernising the industrial structure of these countries and for improving the quality and reliability of infrastructure. In addition new investments may also bring badly needed skills and technologies into the host economy. Evidence from joint ventures in Hungary (Lane, 1994) shows that such firms had a higher propensity to trade and invest than purely indigenous firms. Total FDI inflows into Hungary between 1991–93 were equivalent to 25 per cent of total fixed domestic capital formation (UINDTCI, 1995).

Type
Articles
Information
National Institute Economic Review , Volume 156 , May 1996 , pp. 104 - 114
Copyright
Copyright © 1996 National Institute of Economic and Social Research

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Footnotes

∗

We are grateful to Jamuna Agarwal, Ray Barrell, Paul Hare, Martin Weale and participants at the Workshop ‘Role of Foreign Direct Investment in the Transition—the case of the Visegrad countries’, organised by the Institute for World Economics of the Hunganan Academy of Sciences, Budapest, March 1996 for helpful comments. This research was partially funded by the ESRC grant no. R000236306. Katenna Smidkova was on secondment from the Czech National Bank.

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