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EU enlargement and consequences for FDI assisted industrial development

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  • Narula, Rajneesh

    (Henley Business School, University of Reading)

  • Bellak, Christian

    (University of Economics Vienna)

Abstract

Many of the new member states as well as candidate and accession countries of the EU are confident that membership will result in substantially increased inward foreign direct investment (FDI) in manufacturing. This paper discusses the policy issues and challenges that cohesion and accession countries face, applying lessons that by now have become mainstream in the parallel discussion of FDI-assisted development in the developing economies. We argue that globalisation has attenuated the benefits that accrue from EU membership for latecomers, and they must now compete for FDI not just with other European countries but also with non-EU emerging economies. We posit that they should not base their industrial development strategy on mere passive reliance of FDI flows without considering how to concatenate their industrial development and the nature of the MNE activities they attract.

Suggested Citation

  • Narula, Rajneesh & Bellak, Christian, 2008. "EU enlargement and consequences for FDI assisted industrial development," MERIT Working Papers 2008-067, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2008067
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    Cited by:

    1. Leonhard Plank & Cornelia Staritz, 2013. "‘Precarious upgrading’ in electronics global production networks in Central and Eastern Europe: the cases of Hungary and Romania," Global Development Institute Working Paper Series ctg-2013-31, GDI, The University of Manchester.
    2. Magdalena RADULESCU & Elena Nolica DRUICA, 2011. "FDIs and investment policy in some European countries after their EU accession. Challenges during the crisis," Romanian Journal of Economics, Institute of National Economy, vol. 33(2(42)), pages 169-183, December.
    3. repec:wsr:ecbook:2012:i:iv-002 is not listed on IDEAS
    4. Caroline T Witte & Martijn J Burger & Elena I Ianchovichina & Enrico Pennings, 2017. "Dodging bullets: The heterogeneous effect of political violence on greenfield FDI," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(7), pages 862-892, September.
    5. Martijn J. Burger & Bert van der Knaap & Ronald S. Wall, 2013. "Revealed competition for greenfield investments between European regions," Journal of Economic Geography, Oxford University Press, vol. 13(4), pages 619-648, July.
    6. Gábor HUNYA & Sándor RICHTER, 2011. "Mutual trade and investment of the Visegrad countries before and after their EU accession," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 2, pages 77-91, December.
    7. Magdalena Radulescu & Elena Jianu, 2011. "FDIs in Spain after its EU Accession. Spanish Investments in Romania and How can be used Spanish Experience for Romania’s Development," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(2), pages 233-256.
    8. Plank, Leonhard & Staritz, Cornelia, 2013. ""Precarious upgrading" in electronics global production networks in Central and Eastern Europe: The cases of Hungary and Romania," Working Papers 41, Austrian Foundation for Development Research (ÖFSE).
    9. Oana Cristina Popovici & Adrian Cantemir Călin, 2014. "FDI theories. A location-based approach," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(53), pages 3-24, September.
    10. Nadja Walch & Julia Wörz, 2012. "The Impact of Country Risk Ratings and of the Status of EU Integration on FDI Inflows in CESEE Countries," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 8-26.
    11. 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.

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    More about this item

    Keywords

    FDI; European Union; MNEs; multinationals; absorptive capacity; globalization; industrial development; EU enlargement; foreign investment; direct investment;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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