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Foreign Investment and Transition in Central/Eastern Europe along the Phase Curve

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  • Valentina HARTARSKA
  • Henry THOMPSON

    ()

Abstract

An empirical neoclassical growth model reveals that foreign investment incrementally contributed to the economic transition of 27 countries in Central and Eastern Europe during the transition period 1989 to 2003. The model departs from the theoretical and applied growth literatures by estimating the phase equation of a partial adjustment model of growth that implicitly includes foreign investment. The pooled estimate reveals an early phase of economic growth that will take generations, aside from a few positive outliers, to approach the status of the developed countries.

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Bibliographic Info

Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 8 (2008)
Issue (Month): 2 ()
Pages: 67-78

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Handle: RePEc:eaa:aeinde:v:8:y:2008:i:2_6

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Related research

Keywords: neoclassical growth; foreign investment; Central Eastern Europe;

References

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  1. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
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Cited by:
  1. Lucyna Kornecki & Vedapuri Raghavan, 2011. "Inward FDI Stock and Growth in Central and Eastern Europe," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 19-30, February.

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