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FDI and productivity convergence in Central and Eastern Europe: an industry-level investigation

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  • Martin Bijsterbosch

    ()

  • Marcin Kolasa

    ()

Abstract

This paper presents empirical evidence of the effect of FDI inflows on productivity convergence in central and eastern Europe, using industry-level data. Four conclusions stand out. First, there is a strong convergence effect in productivity, both at the country and at the industry level. Second, FDI inflow plays an important role in accounting for productivity growth. Third, the impact of FDI on productivity critically depends on the absorptive capacity of recipient countries and industries. Fourth, there is important heterogeneity across countries, industries and time with respect to some of the main findings. JEL Classification: C23, F21, O33

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Bibliographic Info

Article provided by Springer in its journal Review of World Economics.

Volume (Year): 145 (2010)
Issue (Month): 4 (January)
Pages: 689-712

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Handle: RePEc:spr:weltar:v:145:y:2010:i:4:p:689-712

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Keywords: Productivity convergence; FDI; Transition economies; Absorptive capacity; Panel data; C23; F21; O33;

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Citations

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Cited by:
  1. Jan Hanousek & Evžen Kočenda & Mathilde Maurel, 2010. "Direct and indirect effects of FDI in emerging European markets : a survey and meta-analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00469544, HAL.
  2. Aleksandra Parteka, 2013. "The role of trade in intra-industry productivity growth - the case of old and new European Union countries (1995-2007)," GUT FME Working Paper Series A 1, Faculty of Management and Economics, Gdansk University of Technology.
  3. Aleksandra Parteka & Joanna Wolszczak-Derlacz, 2012. "The Impact of Trade Integration with the EU on Porductivity in a Post-Transition Economy. The Case of Polish Manufacturing Sectors," Working Papers 1202, Instytut Rozwoju, Institute for Development.
  4. Kolasa, Marcin, 2010. "Real convergence and its illusions," Working Paper Series 1231, European Central Bank.
  5. Mebratie, A.D. & van Bergeijk, P.A.G., 2011. "Firm Heterogeneity and Development: A Meta Analysis of FDI Productivity Spill-overs," ISS Working Papers - General Series 525, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  6. Iwasaki, Ichiro & Tokunaga, Masahiro, 2013. "Macroecnomic Impacts of FDI in Transition Economies: A Meta-Study," RRC Working Paper Series 39, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
  7. Imola Drigă, 2011. "FDI Flows and Host Country Economic Development," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(4), pages 101-108.
  8. Iwasaki, Ichiro & Suganuma, Keiko, 2014. "Foregign Direct Investment and Regional Economic Growth in Russia: An Econometric Assessment," RRC Working Paper Series 44, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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