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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:
  • Joze Damijan
  • Crt 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

  • Joze Damijan & Crt 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 627717, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    • Handle: RePEc:ete:vivwps:627717
    Note: paper number 2013.37
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    Cited by:

    1. 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.
    2. 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.
    3. repec:era:wpaper:dp-2015-49 is not listed on IDEAS
    4. 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.

    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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