IDEAS home Printed from https://ideas.repec.org/a/bpj/glecon/v6y2006i3n4.html
   My bibliography  Save this article

Foreign Direct Investments and Productivity Growth in the Agri-Food Sector of Eastern Europe and Central Asia: An Empirical Analysis

Author

Listed:
  • Kaditi Eleni Ath.

    (Katholieke Universiteit Leuven)

Abstract

Since the beginning of transition, Eastern European and Central Asian (ECA) countries compete against one another in attracting foreign investors by offering ever more generous incentive packages. Recent empirical research provides though little support for the idea that foreign direct investments (FDI) have a positive effect on local economies. This paper examines then whether FDI benefits are sufficient to justify the kind of policy interventions seen in practice. Analysis focuses on the impact of the increasing presence of multinationals on the economic development of transition economies in ECA through the generation of vertical and horizontal spillovers. Our theoretical model shows that policies which promote FDI are more likely to be justified on welfare grounds if multinationals engage in technology transfer that improves local suppliers' productivity, multinationals' technological advantage over the local competitors is only moderate, and the establishment of foreign affiliates does not lower the local processors' market share. Using data from the Business Environment and Enterprise Performance Surveys (BEEPS), empirical research suggests, however, that foreign investments are more likely to have a positive impact on their local suppliers, and a negative one on their local competitors, implying that the second and third conditions are unlikely to hold.

Suggested Citation

  • Kaditi Eleni Ath., 2006. "Foreign Direct Investments and Productivity Growth in the Agri-Food Sector of Eastern Europe and Central Asia: An Empirical Analysis," Global Economy Journal, De Gruyter, vol. 6(3), pages 1-32, September.
  • Handle: RePEc:bpj:glecon:v:6:y:2006:i:3:n:4
    DOI: 10.2202/1524-5861.1165
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1524-5861.1165
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.2202/1524-5861.1165?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Dyker & Michael Emerson & Michael Gasiorek & Peter Holmes & Malgorzata Jakubiak & Andre Jungmittag & Vicki Korchagin & Alina Kudina & Evgeny Polyakov & Andrei Roudoi & Gevorg Torosyan, 2008. "Economic Feasibility, General Economic Impact and Implications of a Free Trade Agreement Between the European Union and Armenia," CASE Network Reports 0080, CASE-Center for Social and Economic Research.
    2. Maria E. de Boyrie & Mordechai Kreinin, 2013. "Openness to Import and Productivity," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 13(03n04), pages 319-331, December.
    3. Dairabayeva Karlygash & Carayannis Elias, 2014. "Targeted Trade-Related Policies and Manufacturing Firm Productivity in Eastern Europe and Central Asia: Effect of Corruption," Global Economy Journal, De Gruyter, vol. 14(2), pages 265-286, April.
    4. David Dyker & Michael Emerson & Michael Gasiorek & Peter Holmes & Malgorzata Jakubiak & Andre Jungmittag & Vicki Korchagin & Alina Kudina & Giorgi Pertaia & Evgeny Polyakov & Andrei Roudoi & Michael T, 2008. "Economic Feasibility, General Economic Impact and Implications of a Free Trade Agreement Between the European Union and Georgia," CASE Network Reports 0079, CASE-Center for Social and Economic Research.
    5. Metaxas, Theodore & Kechagia, Polyxeni, 2015. "FDI in Peru and Uzbekistan: A comparative analysis in brief," MPRA Paper 63849, University Library of Munich, Germany.
    6. Kechagia, Polyxeni & Metaxas, Theodore, 2016. "FDI in Central Asia: Uzbekistan," MPRA Paper 71326, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:glecon:v:6:y:2006:i:3:n:4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.