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Multinationals in the Czech Motor Vehicles Industry: A General Equilibrium Analysis for a Transition Economy

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  • Maria Latorre
  • Antonio Gómez-Plana

Abstract

This study offers a computable general equilibrium methodology to analyse the involvement of multinationals in the motor vehicles sector in the post-communist Czech Republic. This allows estimating not only the economy-wide impact, but also the sectoral adjustments in a unified framework. The real levels of foreign direct investment received in the motor vehicles sector seem to produce only limited forward and backward linkages. Therefore, gross domestic product (GDP) and welfare increase slightly—and can even fall—after a certain degree of capital accumulation because saturation effects arise. Profit repatriation considerably exacerbates the negative effect on GDP and welfare.

Suggested Citation

  • Maria Latorre & Antonio Gómez-Plana, 2011. "Multinationals in the Czech Motor Vehicles Industry: A General Equilibrium Analysis for a Transition Economy," Europe-Asia Studies, Taylor & Francis Journals, vol. 63(8), pages 1425-1447.
    • Handle: RePEc:taf:ceasxx:v:63:y:2011:i:8:p:1425-1447
    DOI: 10.1080/09668136.2011.601114
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    Cited by:

    1. Hana Machková & Paul-Marc Collin, 2015. "Market Entry Strategies of Passenger Carmakers - The Case Study of the Czech Republic," Central European Business Review, Prague University of Economics and Business, vol. 2015(3), pages 23-34.
    2. Gómez-Plana Antonio G. & Latorre María C., 2019. "Digitalization, Multinationals and Employment: An Empirical Analysis of Their Causal Relationships," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(3), pages 399-439, June.

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