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Functional and Sectoral Division of Labour within Central and Eastern European Countries: Evidence from Greenfield FDI

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  • Teodora Dogaru
  • Martijn Burger
  • Bas Karreman
  • Frank Oort

Abstract

In this paper, we analyse the sectoral and functional division of labour in Central and Eastern European (CEE) regions within the convergence debate. By analysing the investment decisions of multinational corporations in 49 NUTS 2 regions across six European CEE countries (Poland, Czech Republic, Slovakia, Hungary, Romania and Bulgaria), we show that capital city regions not only receive more greenfield FDI but also attract a larger variety of investments in terms of sectors and functions. Capital cities are more likely to host higher-end sectors and functions, which provides an explanation for the existing regional disparities within CEE countries. These results highlight the importance of functional and sectoral divisions of labour in the view of regional profiling and contribute to the recent EU Cohesion Policy debate.

Suggested Citation

  • Teodora Dogaru & Martijn Burger & Bas Karreman & Frank Oort, 2015. "Functional and Sectoral Division of Labour within Central and Eastern European Countries: Evidence from Greenfield FDI," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 106(1), pages 120-129, February.
    • Handle: RePEc:bla:tvecsg:v:106:y:2015:i:1:p:120-129
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    Cited by:

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    2. Katarina Bacic & Ivana Rasic Bakaric & Suncana Slijepcevic, 2017. "Sources of productivity differentials in manufacturing in post-transition urban South-East Europe," Working Papers 1706, The Institute of Economics, Zagreb.
    3. Riccardo Crescenzi & Roberto Ganau & Michael Storper, 2022. "Does foreign investment hurt job creation at home? The geography of outward FDI and employment in the USA," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 53-79.
    4. Dogaru, Teodora & Burger, Martijn & van Oort, Frank & Karreman, Bas, 2014. "The Geography of Multinational Corporations in CEE Countries: Perspectives for Second-Tier City Regions and European Cohesion Policy," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 29, pages 193-214.
    5. Amendolagine, Vito & Crescenzi, Riccardo & Rabellotti, Roberta, 2022. "The geography of acquisitions and greenfield investments: firm heterogeneity and regional institutional conditions," LSE Research Online Documents on Economics 115597, London School of Economics and Political Science, LSE Library.
    6. Kilroy,Austin Francis Louis & Ganau,Roberto, 2020. "Economic Growth in European Union NUTS-3 Regions," Policy Research Working Paper Series 9494, The World Bank.

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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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