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Foreign Direct Investment and Enterprise Performance in Transition Countries: Evidence from Russia and Ukraine

  • Valentijn Bilsen
  • P Van Maldegem
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    This study compares the performance of foreign firms with domestic ones in Russia and Ukraine, using recent survey data of 450 enterprises. We find that foreign owned firms are less prone to inter-enterprise arrears and wage arrears, have a better export performance, and use more sophisticated competition strategies. Foreign investment appears to enhance entrepreneurial know-how. In case of de novo firms foreign investment often led to a 'jump start' of the enterprise, rather than a gradual adjustment over time. Foreign firms have a positive spill-over effect. They introduce healthy financial management methods, and proliferate badly needed market oriented entrepreneurial know-how through the managerial market.

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    Paper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp144.

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    Date of creation: Sep 1999
    Date of revision:
    Handle: RePEc:cbr:cbrwps:wp144
    Note: PRO-1
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    1. Eduardo Borensztein & Jose De Gregorio & Jong-Wha Lee, 1995. "How Does Foreign Direct Investment Affect Economic Growth?," NBER Working Papers 5057, National Bureau of Economic Research, Inc.
    2. Valentijn Bilsen & Jozef Konings, 1997. "Job Creation, Job Destruction and Growth of Newly Established, Privatized and State-Owned Enterprises in Transition Economies: Survey Evidence from Bulgaria, Hungary and Romania," William Davidson Institute Working Papers Series 106, William Davidson Institute at the University of Michigan.
    3. Blomstrom, Magnus & Sjoholm, Fredrik, 1999. "Technology transfer and spillovers: Does local participation with multinationals matter?1," European Economic Review, Elsevier, vol. 43(4-6), pages 915-923, April.
    4. Valentijn Bilsen & Wim Lagae, 1997. "Foreign capital inflow and private enterprise development in Poland: A survey," Post-Communist Economies, Taylor & Francis Journals, vol. 9(4), pages 449-467.
    5. James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
    6. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
    7. Klaus E. Meyer, 1995. "Foreign direct investment in the early years of economic transition: a survey," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(3), pages 301-320, 09.
    8. Gow, Hamish R & Swinnen, Johan F M, 1998. "Up- and Downstream Restructuring, Foreign Direct Investment, and Hold-Up Problems in Agricultural Transition," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(3), pages 331-50.
    9. Clifford Gaddy & Barry W. Ickes, 1998. "To Restructure or Not to Restructure: Informal Activities and Enterprise Behavior in Transition," William Davidson Institute Working Papers Series 134, William Davidson Institute at the University of Michigan.
    10. Djankov, Simeon & Hoekman, Bernard, 1998. "Avenues of Technology Transfer: Foreign Investment and Productivity Change in the Czech Republic," CEPR Discussion Papers 1883, C.E.P.R. Discussion Papers.
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