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The Effect of (the Absence of) Multinationals' Foreign Direct Investment on the Level of Eastern European Trade


  • Murrell, Peter


Identifying the most important systemic characteristics that have determined the behavior of Centrally Planned Economies (CPEs), is crucial for the choice of a transition path within the ongoing economic reforms in these countries. The empirical literature on the comparative behavior of CPEs and Market Economies (MEs), often gives little help in explaining exactly why the economic performance of CPEs differs from that of MEs. This is certainly the case for studies that have previously examined the comparative levels of CPE trade. Employing the data and methodology of an existing study (Browning, 1985), and adding a variable representing the level of Multinational Corporation (MNC), activity in each country, it is shown that the low levels of CPE trade can be completely explained by the MNC activity, without recourse to other effects of the economic system. Copyright 1991 by Kluwer Academic Publishers

Suggested Citation

  • Murrell, Peter, 1991. "The Effect of (the Absence of) Multinationals' Foreign Direct Investment on the Level of Eastern European Trade," Economic Change and Restructuring, Springer, vol. 24(3), pages 151-160.
  • Handle: RePEc:kap:ecopln:v:24:y:1991:i:3:p:151-60

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    Cited by:

    1. Andrzej CieĊ›lik, 2009. "Foreign direct investment and the volume of trade: the case of Poland," Economic Change and Restructuring, Springer, vol. 42(4), pages 273-291, November.

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