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Western enterprises on eastern markets: The German perspective

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  • Schmidt, Klaus-Dieter
  • Naujoks, Petra

Abstract

The paper offers a vision of the future of cross-border activities between Germany and the Central and East European reform countries. It provides a comprehensive theoretical framework and it presents some stylized facts. It focuses on three prominent areas: trade in goods and services, off-shore processing and foreign direct investment. Although trade in goods and services is still the dominant form of cross-border activities, other forms make up mightily. Industry and country variables strongly influence the type of activities. Trade and off-shore processing are predominantly derived from comparative advantages (especially cheap labour) in Heckscher- Ohlin industries. Foreign direct investment, however, can be found mainly in (mobile) Schumpcter industries.

Suggested Citation

  • Schmidt, Klaus-Dieter & Naujoks, Petra, 1993. "Western enterprises on eastern markets: The German perspective," Kiel Working Papers 607, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:607
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    References listed on IDEAS

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    1. Peter J. Buckley & Mark Casson, 1991. "The Future of the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-21204-0.
    2. George Norman & John Dunning, 1984. "Intra-industry foreign direct investment: Its rationale and trade effects," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 120(3), pages 522-540, September.
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    Cited by:

    1. Naujoks, Petra & Schmidt, Klaus-Dieter, 1995. "Foreign direct investment and trade in transition countries: Tracing links – A sequel," Kiel Working Papers 704, Kiel Institute for the World Economy (IfW Kiel).
    2. Naujoks, Petra & Schmidt, Klaus-Dieter, 1994. "Outward processing in Central and East European transition countries: Issues and results from German statistics," Kiel Working Papers 631, Kiel Institute for the World Economy (IfW Kiel).

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