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Growth and Convergence in European Transition Economies : The Impact of Foreign Direct Investment

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  • JASMINKA SOHINGER

Abstract

Foreign direct investment (FDI), with its growth-enhancing capacity, has played a significant role in setting the transition economies onto the path of convergence with their more affluent neighbors, which is enhanced by their recent membership in one of the richest clubs in the world, the European Union. The differential impact of FDI in terms of its sectoral composition on productivity and efficiency of the host country, as well as its propensity to stimulate institution building, are changing both the economic and political landscapes in the Central and Eastern European and Baltic region. The implicit requirements that FDI poses for the receiving country together with the EU accession-driven reforms fit together in a mutually reinforcing system that is helping the goals of transition and the convergence process. The achievement of both goals is seen as the best guarantor of peace and security in the Central and Eastern European and Baltic region.

Suggested Citation

  • Jasminka Sohinger, 2005. "Growth and Convergence in European Transition Economies : The Impact of Foreign Direct Investment," Eastern European Economics, Taylor & Francis Journals, vol. 43(2), pages 73-94, March.
  • Handle: RePEc:mes:eaeuec:v:43:y:2005:i:2:p:73-94
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    Citations

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    Cited by:

    1. Rodrigo Alegria, 2006. "Countries, Regions and Multinational Firms: Location Determinants in the European Union," ERSA conference papers ersa06p143, European Regional Science Association.
    2. Elvira Sapienza, 2009. "FDI and Growth in Central and Southern Eastern Europe," Quaderni DSEMS 12-2009, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
    3. Rosanna Pittiglio & Filippo Reganati & Edgardo Sica, 2015. "Do Multinational Enterprises Push up the Wages of Domestic Firms in the Italian Manufacturing Sector?," Manchester School, University of Manchester, vol. 83(3), pages 346-378, June.
    4. Rasmus Kattai & John Lewis, 2005. "Hooverism, Hyperstabilisation or Halfway-House? Describing Fiscal Policy in Central and Eastern European EU Members," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(2), pages 38-47, July.
    5. Valentin Cojanu, 2007. "A Discussion on Competitive Groups of Countries within the European Area of Integration," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 5(2), pages 185-202.
    6. Kaitila, Ville, 2007. "Free Trade between the EU and Russia - Sectoral Effects and Impacts on Northwest Russia," Discussion Papers 1087, The Research Institute of the Finnish Economy.
    7. Lai, Mingyong & Wang, Hua & Zhu, Shujin, 2009. "Double-edged effects of the technology gap and technology spillovers: Evidence from the Chinese industrial sector," China Economic Review, Elsevier, vol. 20(3), pages 414-424, September.
    8. Virmantas Kvedaras, 2005. "Explanation of Economic Growth Differences in the CEE Countries: Importance of the BOP Constraint," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(2), pages 48-65, July.
    9. Claus-Friedrich Laaser & Klaus Schrader, 2005. "Baltic Trade with Europe: Back to the Roots?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(2), pages 15-37, July.
    10. Morten Hansen, 2005. "The Irosh Growth Miracle: Can Latvia Replicate?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 5(2), pages 3-14, July.
    11. Donny Tang, 2015. "Has the European Financial Integration Promoted the Economic Growth Among the New European Union Countries?," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 7(1).

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