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EU enlargement and consequences for FDI assisted industrial development

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  • Christian Bellak

    ()
    (Department of Economics, University of Economics and Business Administration, Vienna)

  • Rajneesh Narula

    ()
    (School of Management, University of Reading)

Abstract

Many of the new member states as well as candidate and accession countries of the EU are confident that membership will result in substantially increased inward foreign direct investment (FDI) in manufacturing. This paper discusses the policy issues and challenges that cohesion and accession countries face, applying lessons that by now have become mainstream in the parallel discussion of FDI-assisted development in the developing economies. We argue that globalisation has attenuated the benefits that accrue from EU membership for latecomers, and they must now compete for FDI not just with other European countries but also with non- EU emerging economies. We posit that they should not base their industrial development strategy on mere passive reliance of FDI flows without considering how to concatenate their industrial development and the nature of the MNE activities they attract.

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Bibliographic Info

Paper provided by Henley Business School, Reading University in its series Economics & Management Discussion Papers with number em-dp2008-69.

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Length: 27 pages
Date of creation: 21 Nov 2008
Date of revision:
Handle: RePEc:rdg:emxxdp:em-dp2008-69

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  1. Christian Bellak & Markus Leibrecht & Robert Stehrer, 2008. "The Role of Public Policy in Closing Foreign Direct Investment Gaps: An Empirical Analysis," wiiw Working Papers 48, The Vienna Institute for International Economic Studies, wiiw.
  2. Paola Criscuolo & Rajneesh Narula, 2008. "A novel approach to national technological accumulation and absorptive capacity: aggregating Cohen and Levinthal," European Journal of Development Research, Taylor and Francis Journals, vol. 20(1), pages 56-73.
  3. Fritz Breuss & Peter Egger & Michael Pfaffermayr, . "The Impact of Agenda 2000's Structural Policy Reform on FDI in the EU," WIFO Working Papers 150, WIFO.
  4. Frank Barry, 2004. "Prospects for Ireland in an Enlarged EU," The World Economy, Wiley Blackwell, vol. 27(6), pages 829-852, 06.
  5. Christian Bellak & Markus Leibrecht & Joze P. Damijan, 2007. "Infrastructure endowment and corporate income taxes as determinants of Foreign Direct Investment in Central- and Eastern European Countries," LICOS Discussion Papers 19307, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  6. Elizabeth Asiedu, 2006. "Foreign Direct Investment in Africa: The Role of Natural Resources, Market Size, Government Policy, Institutions and Political Instability," The World Economy, Wiley Blackwell, vol. 29(1), pages 63-77, 01.
  7. Altomonte, Carlo & Guagliano, Claudia, 2003. "Comparative study of FDI in Central and Eastern Europe and the Mediterranean," Economic Systems, Elsevier, vol. 27(2), pages 223-246, June.
  8. Aurora Galego & Carlos Vieira & Isabel Vieira, 2004. "The CEEC as FDI Attractors: A Menace to the EU Periphery?," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 40(5), pages 74-91, September.
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  14. Kimberly A. Clausing & Cosmina L. Dorobantu, 2005. "Re-entering Europe: Does European Union candidacy boost foreign direct investment?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(1), pages 77-103, 01.
  15. Joze Mencinger, 2003. "Does Foreign Direct Investment Always Enhance Economic Growth?," Kyklos, Wiley Blackwell, vol. 56(4), pages 491-508, November.
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Citations

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Cited by:
  1. Gábor HUNYA & Sándor RICHTER, 2011. "Mutual trade and investment of the Visegrad countries before and after their EU accession," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 2, pages 77-91, December.
  2. Martin Falk, 2012. "Determinants of Greenfield Investment in Knowledge Intensive Business Services," FIW Research Reports series IV-002, FIW.
  3. Magdalena RADULESCU & Elena Nolica DRUICA, 2011. "FDIs and investment policy in some European countries after their EU accession. Challenges during the crisis," Romanian Journal of Economics, Institute of National Economy, vol. 33(2(42)), pages 169-183, December.
  4. Nadja Walch & Julia Wörz, 2012. "The Impact of Country Risk Ratings and of the Status of EU Integration on FDI Inflows in CESEE Countries," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3.
  5. Martijn J. Burger & Bert van der Knaap & Ronald S. Wall, 2012. "Revealed Competition for Greenfield Investments between European Regions," Tinbergen Institute Discussion Papers 12-063/3, Tinbergen Institute.
  6. Leonhard Plank & Cornelia Staritz, 2013. "‘Precarious upgrading’ in electronics global production networks in Central and Eastern Europe: the cases of Hungary and Romania," Brooks World Poverty Institute Working Paper Series ctg-2013-31, BWPI, The University of Manchester.
  7. Magdalena Radulescu & Elena Jianu, 2011. "FDIs in Spain after its EU Accession. Spanish Investments in Romania and How can be used Spanish Experience for Romania’s Development," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(2), pages 233-256.
  8. Martin Falk, 2013. "New empirical findings for international investment in intangible assets," WWWforEurope Working Papers series 30, WWWforEurope.

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