FDI in Hungary - the first mover's advantage and disadvantage
Presenting a case study of FDI in Hungary, this paper first reviews the characteristics of FDI in Hungary since the outset of transition. It then examines the determinants of FDI in Hungary, finding that early and comprehensive privatisation and the creation of a generally business-friendly policy environment played key roles in making Hungary an early leader in FDI flows to countries in Central and Eastern Europe. But the paper also observes that some of Hungary's first-mover advantage has been eroded in recent years as other countries have provided increasingly friendly environments for FDI, often combined with lower labour costs. The paper then proceeds to assess the influence of FDI on Hungary's economy. It concludes that FDI has had, on balance, a positive impact on economic performance although hard evidence of spillovers to indigenous firms is difficult to find.
|Date of creation:||18 Jun 2004|
|Date of revision:|
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- Urmas Varblane & Tomasz Mickiewicz & Slavo Radosevic, 2000.
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University of Tartu - Faculty of Economics and Business Administration Working Paper Series
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[Real wages and earning inequalities, 1986-1996. Part I. The transformation of wage structure i," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 612-634.
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- Gábor Pula, 2003. "Capital Stock Estimation in Hungary: A Brief Description of Methodolgy and Results," MNB Working Papers 2003/7, Magyar Nemzeti Bank (Central Bank of Hungary).
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- Laura Resmini, 1999.
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LICOS Discussion Papers
8399, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Laura Resmini, 2000. "The Determinants of Foreign Direct Investment in the CEECs: New evidence from sectoral patterns," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(3), pages 665-689, November.
- Joze P. Damijan & Mark Knell & Boris Majcen & Matija Rojec, 2003. "Technology Transfer through FDI in Top-10 Transition Countries: How Important are Direct Effects, Horizontal and Vertical Spillovers?," William Davidson Institute Working Papers Series 549, William Davidson Institute at the University of Michigan.
- Karoly Fazekas, 2003. "Effects of foreign direct investment on the performance of local labour markets - The case of Hungary," Budapest Working Papers on the Labour Market 0303, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- Pye, Robert, 1998. "Foreign direct investment in Central Europe:: Experiences of major Western investors," European Management Journal, Elsevier, vol. 16(4), pages 378-389, August.
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