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How accession to the European Union has affected external trade and foreign direct investment in Central European economies

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  • Kaminski, Bartlomiej

Abstract

The collapse of central planning set in motion the reintegration of the Central European countries into the world economy. The European Union (EU), because of its proximity, economic weight, and policy-induced deep integration, has shaped these countries'politics, and economics. The process of accession to the EU - which began with the signing of the European Association Agreements in 1991 - has influenced their economic institutions, policies, and performance. The author traces the emerging architecture of commercial relations in Europe, and argues that the accession process had its greatest impact on capital flows, and later on good flows. The countries that have benefited most from accession, are those that followed the path of radical liberal reform. Radical liberal reform, combined with preferential access to EU markets, attracted foreign direct investment. The European Union provided an outlet, initially for Central European countries'unskilled-labor intensive products, and more recently for skilled-labor intensive, and technology-based products. Knowledge-intensive imports from the European Union, have also contributed to industrial realignment in the Central European countries. The prospect of accession, and, since 1998, unfettered access to EU markets for industrial products, has given a boost to multinationals, relocating production in these countries.

Suggested Citation

  • Kaminski, Bartlomiej, 2001. "How accession to the European Union has affected external trade and foreign direct investment in Central European economies," Policy Research Working Paper Series 2578, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2578
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Luca De Benedictis & Lucia Tajoli, 2003. "Economic integration, similarity and convergence in the EU and CEECs trade structures," KITeS Working Papers 148, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2003.
    2. Kaminski, Bartlomiej & de la Rocha, Manuel, 2003. "Stabilization and association process in the Banlkans : integration options and their assessment," Policy Research Working Paper Series 3108, The World Bank.
    3. J. Caetano & A. Galego & E. Vaz & C. Vieira & I. Vieira, 2002. "The Eastward Enlargement of the Eurozone: Trade and FDI," Eastward Enlargement of the Euro-zone Working Papers wp07, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Aug 2002.
    4. Popko Denis & Tkachuk Oleksandr, 2007. "On the Patterns of Trade Convergence in European Transition Countries," EERC Working Paper Series 07/08e, EERC Research Network, Russia and CIS.
    5. Sõrg, Mart & Tuusis, Danel, 2008. "Foreign banks increase the social orientation of Estonian financial sector," Wirtschaftswissenschaftliche Diskussionspapiere 01/2008, University of Greifswald, Faculty of Law and Economics.
    6. Laura Resmini, 2007. "Regional Patterns of Industry Location in Transition Countries: Does Economic Integration with the European Union Matter?," Regional Studies, Taylor & Francis Journals, vol. 41(6), pages 747-764.
    7. Nuno Crespo & Maria Paula Fontoura, 2007. "Integration of CEECs into EU Market: Structural Change and Convergence," Journal of Common Market Studies, Wiley Blackwell, vol. 45, pages 611-632, September.
    8. José Manuel Martins Caetano & Aurora Galego & Elsa Vaz & Isabel Vieira & Carlos Vieira, 2002. "The Impacts of the Eurozone´s Eastward Enlargement on Trade and FDI: Survey of the Literature," Economics Working Papers 1_2002, University of Évora, Department of Economics (Portugal).
    9. Slavica Penev & Matija Rojec, 2014. "The Future Of Fdi In South Eastern European Countries: Messages From New Eu Member States," Economic Annals, Faculty of Economics, University of Belgrade, vol. 59(202), pages 43-68, July – Se.
    10. Kaminski, Bartlomiej, 2006. "Bulgaria's institutions and policies : integrating into Pan-European markets," Policy Research Working Paper Series 3864, The World Bank.
    11. Resmini, Laura, 2003. "Economic integration, industry location and frontier economies in transition countries," Economic Systems, Elsevier, vol. 27(2), pages 205-221, June.
    12. 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.
    13. Mika Widgrén, 2001. "Eastern Enlargement: Trade and Industrial Location in Europe," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(2), pages 14-18, October.
    14. Alessia Amighini & Stefano Chiarlone, 2005. "New comparative advantages in the Central and Eastern European countries," LIUC Papers in Economics 182, Cattaneo University (LIUC).

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