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

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  • Lansbury, Melanie
  • Pain, Nigel
  • Smidkova, Katerina

Abstract

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).

Suggested Citation

  • Lansbury, Melanie & Pain, Nigel & Smidkova, Katerina, 1996. "Foreign Direct Investment in Central Europe Since 1990: An Econometric Study," National Institute Economic Review, National Institute of Economic and Social Research, vol. 156, pages 104-114, May.
    • Handle: RePEc:cup:nierev:v:156:y:1996:i::p:104-114_9
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    References listed on IDEAS

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