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Foreign direct investment and trade in transition countries: Tracing links

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  • Naujoks, Petra
  • Schmidt, Klaus-Dieter

Abstract

Several studies have emphasized the links between trade reorientation and industrial restructuring in transition countries. In these studies trade has usually been considered as transactions among unrelated enterprises in different countries. However, an important and steadily growing share of trade are transactions with multinational enterprises and their foreign affiliates. Foreign direct investment of multinationals is the missing link in explaining this type of trade. The paper deals with the so-called intra-firm trade of multinationals operating in transition countries. It argues that trade within the internal networks of multinationals is the major route for international technology'transfer. It summarizes shortly previous studies and takes a glance at the trade structure of Hungarian enterprises involved in a joint venture. Finally, it discusses the implications for corporate restructuring in transition countries.

Suggested Citation

  • Naujoks, Petra & Schmidt, Klaus-Dieter, 1995. "Foreign direct investment and trade in transition countries: Tracing links," Kiel Working Papers 667, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:667
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    References listed on IDEAS

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    1. Mario Zejan, 1989. "Intra-firm trade and Swedish multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(4), pages 814-833, December.
    2. Mark Casson, 1979. "Alternatives to the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-04645-4, October.
    3. Nunnenkamp, Peter & Gundlach, Erich & Agarwal, Jamuna Prasad, 1994. "Globalisation of production and markets," Open Access Publications from Kiel Institute for the World Economy 807, Kiel Institute for the World Economy (IfW Kiel).
    4. Helleiner, G K & Lavergne, Real, 1979. "Intra-Firm and Industrial Exports to the United States," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 297-311, November.
    5. Sanjaya Lall, 1980. "Transfer-Pricing by Multinational Manufacturing Firms," Palgrave Macmillan Books, in: The Multinational Corporation, chapter 5, pages 110-136, Palgrave Macmillan.
    6. Hare, Paul G & Hughes, Gordon, 1991. "Competitiveness and Industrial Restructuring in Czechoslovakia, Hungary and Poland," CEPR Discussion Papers 543, C.E.P.R. Discussion Papers.
    7. Dunning, John H., 1974. "Multinational enterprises and trade flows of less developed countries," World Development, Elsevier, vol. 2(2), pages 131-138, February.
    8. Landesmann, Michael & Székely, Istvan P., 1991. "Industrial Restructuring and the Reorientation of Trade in Czechoslovakia, Hungary and Poland," CEPR Discussion Papers 546, C.E.P.R. Discussion Papers.
    9. Naujoks, Petra & Schmidt, Klaus-Dieter, 1994. "Outward processing in Central and East European transition countries: Issues and results from German statistics," Kiel Working Papers 631, Kiel Institute for the World Economy (IfW Kiel).
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    Citations

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    Cited by:

    1. Doris Hanzl-Weiss, 1970. "Development and Prospects of the Leather and Leather Products Sector in the Central and Eastern European Countries," wiiw Industry Study 2001_1, The Vienna Institute for International Economic Studies, wiiw.
    2. Schmidt, Klaus-Dieter, 1998. "Emerging East-West collaborative networks: An appraisal," Kiel Working Papers 882, Kiel Institute for the World Economy (IfW Kiel).
    3. Schmidt, Klaus-Dieter, 1996. "Small and medium sized enterprises (SMEs) in international business: A survey of recent literature," Kiel Working Papers 721, Kiel Institute for the World Economy (IfW Kiel).
    4. Alessia Amighini & Stefano Chiarlone, 2005. "New comparative advantages in the Central and Eastern European countries," LIUC Papers in Economics 182, Cattaneo University (LIUC).
    5. Doris Hanzl‐Weiß, 2004. "Enlargement and the Textiles, Clothing and Footwear Industry," The World Economy, Wiley Blackwell, vol. 27(6), pages 923-945, June.
    6. Doris Hanzl-Weiss, 1970. "Development and Prospects of the Wood and Wood Products Sector in the Central and Eastern European Countries," wiiw Industry Study 1999_3, The Vienna Institute for International Economic Studies, wiiw.
    7. Lemoine, Françoise, 1998. "Integrating Central and Eastern Europe In the European Trade and Production Network," UCAIS Berkeley Roundtable on the International Economy, Working Paper Series qt5r66s4ng, UCAIS Berkeley Roundtable on the International Economy, UC Berkeley.
    8. Michaël Freudenberg & Françoise Lemoine, 1999. "Central and Eastern European Countries in the International Division of Labour in Europe," Working Papers 1999-05, CEPII research center.
    9. Hillman, Arye L. & Ursprung, Heinrich W., 1996. "The political economy of trade liberalization in the transition," European Economic Review, Elsevier, vol. 40(3-5), pages 783-794, April.
    10. Miklos Szanyi, 2002. "Spillover effects and business linkages of foreign-owned firms in Hungary," IWE Working Papers 126, Institute for World Economics - Centre for Economic and Regional Studies.

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