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The Automotive Industry in the Slovak Republic

Author

Listed:
  • Malgorzata Jakubiak
  • Peter Kolesar
  • Ivailo Izvorski
  • Lucia Kurekova

Abstract

This paper analyzes recent automotive investment in the Slovak Republic and shows how the development of the automotive industry has influenced growth in productivity and output in the broader economy. The study also discusses the motivations for automotive investment, with the country evolving from a relative laggard in reform implementation and foreign direct investment in the late 1990s to one of the region's top performers and one of the fastest-growing economies. It is argued that strong reform implementation, together with continued and credible commitment to reforms, were both preconditions for attracting automotive investments and the key factors that enabled these investments to flourish. The reform efforts were made possible by strong political consensus on accelerating European Union (EU) accession and boosting living standards. Taking into account the specificity of the industry, other aspects related to factor endowments have also played a role. Generous investment incentives appear to have played an important role in swaying foreign investors in selecting the Slovak Republic within the broader region of central Europe. Once investment in automotive production started, it contributed to additional investment by suppliers that has helped generate locally owned suppliers. These, in turn, are beginning to supply car producers in neighboring countries. All told, the full impact of the original automotive investment will be felt only over several years, but even in the early years it has been substantial. With output at the existing three producers set to reach capacity only by 2010, the impact is likely to be more substantial still.

Suggested Citation

  • Malgorzata Jakubiak & Peter Kolesar & Ivailo Izvorski & Lucia Kurekova, 2008. "The Automotive Industry in the Slovak Republic," World Bank Publications - Books, The World Bank Group, number 28010, December.
    • Handle: RePEc:wbk:wbpubs:28010
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Richard Pomfret & Patricia Sourdin, 2016. "Trade between Australia and the EU, 1990 - 2015," School of Economics and Public Policy Working Papers 2016-10, University of Adelaide, School of Economics and Public Policy.
    2. Lucia Mýtna Kureková, 2018. "The automotive industry in Central Europe: A success?," IZA World of Labor, Institute of Labor Economics (IZA), pages 448-448, September.
    3. Miroslav Šipikal & Milan Buček, 2018. "The Role of FDI in Regional Innovation and Its Influence on the Emergence of Knowledge Spillover Effects," Advances in Spatial Science, in: Jan Stejskal & Petr Hajek & Oto Hudec (ed.), Knowledge Spillovers in Regional Innovation Systems, pages 195-218, Springer.
    4. Lefilleur, Julien & Maurel, Mathilde, 2010. "Inter- and intra-industry linkages as a determinant of FDI in Central and Eastern Europe," Economic Systems, Elsevier, vol. 34(3), pages 309-330, September.
    5. Kristóf Gyódi, 2014. "The Impact of FDI on Bilateral Exports: The Case of the Automotive Industry in the Visegrad Countries," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 37.
    6. Alena Pauliková & Zdenka Gyurák Babeľová & Monika Ubárová, 2021. "Analysis of the Impact of Human–Cobot Collaborative Manufacturing Implementation on the Occupational Health and Safety and the Quality Requirements," IJERPH, MDPI, vol. 18(4), pages 1-15, February.
    7. Jan Stejskal & Petr Hajek & Oto Hudec (ed.), 2018. "Knowledge Spillovers in Regional Innovation Systems," Advances in Spatial Science, Springer, number 978-3-319-67029-4, Fall.
    8. Roman Römisch & Peter Huber & Klaus Nowotny & Ulrike Strauss, 2011. "CENTROPE Regional Development Report. Focus on Spatial Integration," WIFO Studies, WIFO, number 43885, Juni.
    9. Miroslav Beblavý & Lucia Mýtna Kureková, 2016. "Labour regime in the ‘new economy’: The case of software industry in Central Europe," Discussion Papers 38, Central European Labour Studies Institute (CELSI).
    10. World Bank, 2009. "Macedonia - Moving to Faster and More Inclusive Growth A Country Economic Memorandum : Main Report and Annex," World Bank Publications - Reports 3067, The World Bank Group.

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