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Eastern Germany in the Process of Catching Up : The Role of Foreign and West German Investors in Technological Renewal

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  • JUTTA GÜNTHER
  • OLIVER GEBHARDT

Abstract

Foreign direct investment (FDI) as a means to support economic transformation and the ongoing process of catch-up development caught researchers' attention for a number of Central and East European countries. Little research, however, has been carried out for eastern Germany in this respect, although FDI plays an important role there too. Descriptive analysis via the use of unique survey data shows that foreign and west German affiliates perform much better with respect to technological capability and labor productivity than do east German firms. The results of the regression analysis, however, show that it is not the status of ownership as such that forms a significant determinant of innovativeness in eastern Germany but, rather, firm characteristics, such as firm size, export intensity, technical state of the equipment, and research and development (R&D) activities. Given that foreign and west German affiliates perform better with respect to all of these characteristics, they can be considered as a means to support the process of technological renewal and economic development.

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Bibliographic Info

Article provided by M.E. Sharpe, Inc. in its journal Eastern European Economics.

Volume (Year): 43 (2005)
Issue (Month): 3 (May)
Pages: 78-102

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Handle: RePEc:mes:eaeuec:v:43:y:2005:i:3:p:78-102

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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=106044

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Cited by:
  1. Andrea Gauselmann, 2013. "R&D Co-operation in European Post-transition Economies," IWH Discussion Papers 4, Halle Institute for Economic Research.
  2. Wolfgang Steffen & Johannes Stephan, 2007. "The Role of the Human Capital and Managerial Skills in Explaining the Productivity Gaps between East and West," IWH Discussion Papers 11, Halle Institute for Economic Research.

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