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The Role of Foreign Direct Investment in the Privatisation and Restructuring of the Czech Motor Industry

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  • Petr Pavlinek

Abstract

Foreign direct investment (FDI) has been considered one of the crucial factors of a successful economic transformation in Central and Eastern Europe. This article investigates the role of FDI in the privatisation and restructuring of the Czech motor industry in the 1990s. In particular, it examines how governmental policies towards FDI affected FDI inflows, the immediate effects of FDI at the enterprise level, and the contested nature of this change. Advantages of foreign ownership for Czech enterprises, such as access to investment capital, access to sale and distribution networks of parent companies and technology transfer are discussed, as well as examples of failures of FDI to result in a successful enterprise restructuring. The information presented is based upon in-depth interviews with top managers of twenty component suppliers, governmental officials and vehicle makers in the Czech Republic as well as on the secondary data.

Suggested Citation

  • Petr Pavlinek, 2002. "The Role of Foreign Direct Investment in the Privatisation and Restructuring of the Czech Motor Industry," Post-Communist Economies, Taylor & Francis Journals, vol. 14(3), pages 359-379.
    • Handle: RePEc:taf:pocoec:v:14:y:2002:i:3:p:359-379
    DOI: 10.1080/1463137022000013421
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    References listed on IDEAS

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    1. Petr Pavlinek & Adrian Smith, 1998. "Internationalization and Embeddedness in East-Central European Transition: The Contrasting Geographies of Inward Investment in the Czech and Slovak Republics," Regional Studies, Taylor & Francis Journals, vol. 32(7), pages 619-638.
    2. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    3. Karla Brom & Mitchell Orenstein, 1994. "The privatised sector in the Czech republic: Government and bank control in a transitional economy," Europe-Asia Studies, Taylor & Francis Journals, vol. 46(6), pages 893-928.
    4. Klaus E Meyer, 2000. "International Production Networks and Enterprise Transformation in Central Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 42(1), pages 135-150, April.
    5. Martin Myant, 1993. "Transforming Socialist Economies," Books, Edward Elgar Publishing, number 330.
    6. David A. Dyker, 2001. "The Dynamic Impact on the Central-Eastern European Economies of Accession to the European Union: Social Capability and Technology Absorption," Europe-Asia Studies, Taylor & Francis Journals, vol. 53(7), pages 1001-1021.
    7. Gábor Hunya (ed.), 2000. "Integration Through Foreign Direct Investment," Books, Edward Elgar Publishing, number 1839.
    8. Bartlomiej Kaminski & Beata Smarzynska, 2001. "Integration into Global Production and Distribution Networks through FDI: The Case of Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 13(3), pages 265-288.
    9. Michal Mejstřík, 1999. "The restructuring after privatization in the czech republic," Prague Economic Papers, Prague University of Economics and Business, vol. 1999(3).
    10. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
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    Cited by:

    1. Mirja Meyborg, 2011. "The Impact of FDI on Innovation and Networking Activity in Central and Eastern Europe - A Patent Analysis," ERSA conference papers ersa10p1362, European Regional Science Association.
    2. Vasileios A. Vlachos & Dimitris Kalimeris, 2010. "International business spillovers in emerging markets: the Visegrad group," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 3(4), pages 330-345.
    3. Eric Rugraff, 2010. "Foreign Direct Investment (FDI) and Supplier-Oriented Upgrading in the Czech Motor Vehicle Industry," Regional Studies, Taylor & Francis Journals, vol. 44(5), pages 627-638.

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