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Global Supply Chains at Work in Central and Eastern European Countries:Impact of FDI on export restructuring and productivity growth

Author

Listed:
  • Jože Damijan
  • Črt Kostevc
  • Matija Rojec

Abstract

This paper empirically accounts for the importance of the 'global supply chains' concept for export restructuring and productivity growth in Central and Eastern European Countries (CEECs) in the period 1995-2007. Using industry-level data and accounting for technology intensity, we show that FDI has significantly contributed to export restructuring in the CEECs. The effects of FDI are, however, heterogenous across countries. While more advanced core CEECs succeeded in boosting exports in higher-end technology industries, non-core CEECs stuck with export specialization in lower-end technology industries. This suggests that where FDI flows have been directed is of key importance. Our results show that export restructuring and economic specialization brought about by FDI during the last two decades in the CEECs might matter a lot for their potential for long-run productivity growth. Industries of higher-end technology intensity have experienced substantially higher productivity growth and so have countries more successful in attracting FDI to these industries.

Suggested Citation

  • Jože Damijan & Črt Kostevc & Matija Rojec, 2013. "Global Supply Chains at Work in Central and Eastern European Countries:Impact of FDI on export restructuring and productivity growth," Working Papers of VIVES - Research Centre for Regional Economics 37, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    • Handle: RePEc:ete:vivwps:37
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    Cited by:

    1. Vesna Bucevska & Gunter Merdzan, 2024. "Foreign Direct Investment, Domestic Investment, And The Role Of Institutions In Central, Eastern, And South-Eastern Europe," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 69(242), pages 27-68, July – Se.
    2. Andrea Éltet? & Ágnes Szunomár, 2016. "Chinese investment and trade ? strengthening ties with Central and Eastern Europe," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 4(1), pages 24-48, February.
    3. Zoltán Elekes & Ron Boschma & Balázs Lengyel, 2018. "Foreign-owned firms as agents of structural change in regions: the case of Hungary 2000-2009," Papers in Evolutionary Economic Geography (PEEG) 1812, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2018.
    4. Matte Hartog & Frank Neffke & J. Ernesto Lopez-Cordova, 2020. "Assessing Ukraine's Role in European Value Chains: A Gravity Equation-cum-Economic Complexity Analysis Approach," Growth Lab Working Papers 163, Harvard's Growth Lab.
    5. Uros Delevic & Irina Heim, 2017. "Institutions In Transition: Is The Eu Integration Process Relevant For Inward Fdi In Transition European Economies?," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 5(1), pages 16-32.
    6. Grzegorz Tchorek, 2016. "Foreign Direct Investment and Investment Development Path. The Case of Visegrad Countries (Bezposrednie Inwestycje Zagraniczne a Inwestycyjna Sciezka Rozwoju. Przypadek krajow grupy Wyszehradzkiej)," Research Reports, University of Warsaw, Faculty of Management, vol. 2(22), pages 201-212.
    7. Zoran Aralica & Nebojša Stojčić, 2015. "Regional Patterns of Deindustrialization and Prospects for Reindustrialization in South and Central East European Countries," wiiw Balkan Observatory Working Papers 118, The Vienna Institute for International Economic Studies, wiiw.
    8. Stojčić, Nebojša & Aralica, Zoran & Anić, Ivan-Damir, 2019. "Spatio-temporal determinants of the structural and productive transformation of regions in Central and East European countries," Economic Systems, Elsevier, vol. 43(3).
    9. Marcin Grela & Aleksandra Majchrowska & Tomasz Michałek & Jakub Mućk & Agnieszka Stążka-Gawrysiak & Grzegorz Tchorek & Marcin Wagner, 2017. "Is Central and Eastern Europe converging towards the EU-15?," NBP Working Papers 264, Narodowy Bank Polski.
    10. Éltető, Andrea, 2014. "A visegrádi országok kereskedelme Ázsiával - a globális termelés lenyomata [The trade of the Visegrád countries with Asia - a manifestation of global production]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 586-608.
    11. Andrea Elteto, 2014. "Trade and investment relations between Central and Eastern Europe and Latin America," IWE Working Papers 206, Institute for World Economics - Centre for Economic and Regional Studies.
    12. Christian Buelens & Marcel Tirpák, 2017. "Reading the Footprints: How Foreign Investors Shape Countries’ Participation in Global Value Chains," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(4), pages 561-584, December.
    13. Andrea Elteto & Agnes Szunomar, 2015. "Ties of Visegrád countries with East Asia – trade and investment," IWE Working Papers 214, Institute for World Economics - Centre for Economic and Regional Studies.
    14. repec:era:wpaper:dp-2015-49 is not listed on IDEAS
    15. Ewa Cieślik, 2019. "Looking for the sectoral interdependence: evidence from the Visegrad countries and China," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 2041-2062, July.

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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