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European Integration and Outward FDI from Central and Eastern Europe – Is There Any Evidence of Knowledge-seeking?

Author

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  • Björn Jindra
  • Sohaib S. Hassan
  • Jutta Günther
  • Uwe Cantner

Abstract

The European Union (EU) Member States in central and eastern Europe (CEE) witnessed a surge in outward foreign direct investment (OFDI) between 2000 and the start of the global financial crisis. This article investigates whether the European integration process altered the relative importance of host country location factors. In particular, we investigate to what extent knowledge-seeking is a relevant investment motive, which has been documented as a key determinant for OFDI from other emerging economies. We apply a discrete choice approach to model foreign location choice of firms from CEE countries (CEECs) within the EU 27 (1996–2010). We find that the EU integration process is related with increasing importance of market access and less emphasis on labour cost advantages. We find heterogeneity in the valuation of foreign knowledge-related assets. The location probability within the EU15 is positively associated with knowledge-seeking. It also plays a role for technology-intensive industries and larger firms.

Suggested Citation

  • Björn Jindra & Sohaib S. Hassan & Jutta Günther & Uwe Cantner, 2015. "European Integration and Outward FDI from Central and Eastern Europe – Is There Any Evidence of Knowledge-seeking?," Journal of Common Market Studies, Wiley Blackwell, vol. 53(6), pages 1248-1267, November.
    • Handle: RePEc:bla:jcmkts:v:53:y:2015:i:6:p:1248-1267
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    File URL: http://hdl.handle.net/10.1111/jcms.12260
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    3. Magdolna Sass & Péter Mihályi, 2019. "Introduction to the Special Issue on the Internationalisation of Central and Eastern European firms," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 69(supplemen), pages 7-11, December.
    4. Damijan, Jože & Kostevc, Crt & Rojec, Matija, 2014. "Outward FDI and company performance in CEECs," Working Paper Series in Economics and Institutions of Innovation 381, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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