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Přímé zahraniční investice a vnější rovnováha v tranzitivní ekonomice: aplikace teorie životního cyklu
[Foreign direct investment and the external balance in a transition economy: the application of life cycle theory]


  • Martin Mandel
  • Vladimír Tomšík


The article analyses a development of the external balance in five Central and Eastern European countries: the Czech Republic, Hungary, Poland, the Slovak Republic, and Slovenia. The main idea of the article is to apply, expand, and empirically verify the ideas of life cycle theory in the area of the impacts of foreign direct investment on the balance of payments in the transition countries. The article defines and explores the basic general stages in the external balance of a transition country. The definition of the stages draws from a model consumer behaviour within the life cycle theory once the external balance stages have been defined as follows: young transition economy, mature transition economy, post-transition economy, and expanding economy. The authors have developed a model that provides criteria which not only classify the current stage of each transition country, but also evaluate the success in the catching-up process of the country examined.

Suggested Citation

  • Martin Mandel & Vladimír Tomšík, 2006. "Přímé zahraniční investice a vnější rovnováha v tranzitivní ekonomice: aplikace teorie životního cyklu
    [Foreign direct investment and the external balance in a transition economy: the application o
    ," Politická ekonomie, University of Economics, Prague, vol. 2006(6), pages 723-741.
  • Handle: RePEc:prg:jnlpol:v:2006:y:2006:i:6:id:580:p:723-741

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    Cited by:

    1. Mirdala, Rajmund, 2008. "Development of international investment position in the selected new European Union member countries," MPRA Paper 9504, University Library of Munich, Germany.

    More about this item


    current account; savings; foreign direct investment; balance of payments; investments; balance of income; financial account; life cycle;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • F30 - International Economics - - International Finance - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics


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