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The Value of Diversity: Foreign Direct Investment and Employment in Central Europe During Economic Recovery

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  • Tomasz Mickiewicz
  • Slavo Radosevic
  • Urmas Varblane

Abstract

We examine the role of FDI in job creation and job preservation as well as their role in changing the structure of employment. Our analysis refers to Czech Republic, Hungary, Slovakia and Estonia. We present descriptive stage model of FDI progression into transition economy. Employment aspects of the model are next analysed. We conclude that the role of FDI in employment creation/preservation has been most successful in Hungary and than in Estonia. Yet, FDI can operate as complement rather than as substitute in employment generation/preservation. The paper shows that the increasing differences in sectoral distribution of FDI employment across countries are closely related to FDI inflows per capita. The bigger diversity of types of FDI is more favourable for the host economy. There is higher likelihood that it will lead to more diverse types of spillovers and skill transfers. If policy is unable to maximise the scale of FDI inflows than policy makers should focus much more on attracting diverse types of FDI.

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Bibliographic Info

Paper provided by One-Europe Programme in its series One Europe or Several? Working Papers with number 5.

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Date of creation: 01 Apr 2000
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Handle: RePEc:erp:oneeur:p0005

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Web page: http://www.one-europe.ac.uk

Related research

Keywords: East-Central Europe; economic integration; employment policy; foreign direct investment;

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Cited by:
  1. Dinga, Marián & Münich, Daniel, 2010. "The impact of territorially concentrated FDI on local labor markets: Evidence from the Czech Republic," Labour Economics, Elsevier, vol. 17(2), pages 354-367, April.
  2. Onaran, Ozlem & Stockhammer, Engelbert, 2008. "The effect of FDI and foreign trade on wages in the Central and Eastern European Countries in the post-transition era: A sectoral analysis for the manufacturing industry," Structural Change and Economic Dynamics, Elsevier, vol. 19(1), pages 66-80, March.
  3. Marian Dinga, 2008. "The Impact of Territorially Concentraced FDI on Local Labor Markets: Evidence from the Czech Republic," CERGE-EI Working Papers wp348, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  4. Koi Nyen Wong & Tuck Cheong Tang, 2011. "Foreign direct investment and employment in manufacturing and services sectors: Fresh empirical evidence from Singapore," Journal of Economic Studies, Emerald Group Publishing, vol. 38(3), pages 313-330, July.
  5. Sass, Magdolna, 2004. "FDI in Hungary - the first mover's advantage and disadvantage," EIB Papers 8/2004, European Investment Bank, Economics Department.
  6. Villa, Stefania, 2010. "Exploring the linkages between investment and employment in Moldova : a time-series analysis," ILO Working Papers 455342, International Labour Organization.

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