IDEAS home Printed from https://ideas.repec.org/a/vrs/ijomae/v54y2018i4p291-303n5.html
   My bibliography  Save this article

Dependent capitalism and the middle-income trap in Europe na East Central Europe

Author

Listed:
  • Myant Martin

    (Associate Researcher, European Trade Union Institute, Brussels, Belgium)

Abstract

The post-2008 slowdown in economic convergence by countries of east central Europe towards the level of western Europe is interpreted with the help of a concept of dependent capitalism. Convergence appeared to be rapid up to that year, but then stalled, albeit with differing results depending on the measure used. Dependent capitalism meant that the driver for economic growth comes from inward investment by multinational companies (MNCs). Domestically owned businesses failed when faced with international competition, and their agenda hampers policies supporting an active role from the state. Inward investment is attracted by low wages and has contributed to substantial growth, but the slowdown in investment was accompanied by much slower economic growth and dangers that past investment could turn into a burden on the external balance. The strategies pursued by incoming MNCs have brought areas of upgrading, but frequently leave technological levels somewhat behind those of western Europe. Even where they use the same technologies as in their home countries, wages still remain significantly lower. Achieving full convergence would require a different growth model following a substantial change in economic policies: this does not appear likely in the near future.

Suggested Citation

  • Myant Martin, 2018. "Dependent capitalism and the middle-income trap in Europe na East Central Europe," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 54(4), pages 291-303, December.
    • Handle: RePEc:vrs:ijomae:v:54:y:2018:i:4:p:291-303:n:5
    DOI: 10.2478/ijme-2018-0028
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/ijme-2018-0028
    Download Restriction: no
    File URL: https://libkey.io/10.2478/ijme-2018-0028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Knez, Klemen, 2022. "Domestic Supplier Spillovers of Global Value Chains in Central and Eastern European Countries," MPRA Paper 112391, University Library of Munich, Germany.

    More about this item

    Keywords

    Eastern Europe; Capitalism; Economic Performance; Dependency;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P17 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Performance and Prospects
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:ijomae:v:54:y:2018:i:4:p:291-303:n:5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: http://kolegia.sgh.waw.pl/en/KGS/Pages/default.aspx .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.