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Foreign Direct Investment in Central and Eastern Europe: Employment Effects in the EU

Author

Listed:
  • Henrik Braconier

    (IUI, Stockholm)

  • Karolina Ekholm

    (Stockholm School of Economics; CEPR)

Abstract

We use firm-level data on Swedish multinationals to analyze how the recent expansion of affiliate employment in Central and Eastern Europe (CEE) has affected affiliate employment elsewhere. According to our results, employment in affiliates located in other low-wage countries in Europe decreased substantially as a consequence of the expansion in CEE. Furthermore, affiliate activities in these countries have become more sensitive to changes in labor costs as firms have set up production in CEE. We find that employment in Sweden and other high-wage European countries has also been affected, but these effects seem to be much smaller.

Suggested Citation

  • Henrik Braconier & Karolina Ekholm, 2002. "Foreign Direct Investment in Central and Eastern Europe: Employment Effects in the EU," Development Working Papers 161, Centro Studi Luca d'Agliano, University of Milano.
  • Handle: RePEc:csl:devewp:161
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    File URL: https://www.dagliano.unimi.it/media/WP2002_161.pdf
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    References listed on IDEAS

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    Cited by:

    1. Zhao, Wei & Liu, Ling & Zhao, Ting, 2010. "The contribution of outward direct investment to productivity changes within China, 1991-2007," Journal of International Management, Elsevier, vol. 16(2), pages 121-130, June.

    More about this item

    Keywords

    Foreign Direct Investment; multinational enterprises; Central and Eastern Europe;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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