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Technological capability of foreign and West German investors in East Germany

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  • Günther, Jutta

Abstract

Foreign direct investment (FDI) plays an important role for countries or regions in the process of economic catching-up since it is assumed – among other things – that FDI brings in new production technology and knowledge. This paper gives an overview about the development of FDI in East Germany based on official data provided by the Federal Bank of Germany. The investigation also includes a comparison of FDI in East Germany to Central East European countries. But the main focus of the paper is an analysis of the technological capability comparing majority foreign and West German owned firms to majority East German owned firms. It shows that foreign and West German subsidiaries in East Germany are indeed characterized by superior technological capability with respect to all indicators looked at (product innovation, research & development, organizational changes etc.).

Suggested Citation

  • Günther, Jutta, 2004. "Technological capability of foreign and West German investors in East Germany," IWH Discussion Papers 189/2004, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:iwh-189
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    1. Gabor Hunya, 2002. "Recent Impacts of Foreign Direct Investment on Growth and Restructuring in Central European Transition Countries," wiiw Research Reports 284, The Vienna Institute for International Economic Studies, wiiw.
    2. Borrmann, Christine, 2003. "Methodological Problems of FDI Statistics in Accession Countries and EU Countries," Report Series 26103, Hamburg Institute of International Economics.
    3. Alan Rugman, 1980. "Internalization as a general theory of foreign direct investment: A re-appraisal of the literature," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 365-379, June.
    4. Döhrn, Roland & Heiduk, Günter (ed.), 1999. "Theorie und Empirie der Direktinvestitionen," RWI Schriften, RWI - Leibniz-Institut für Wirtschaftsforschung, volume 65, number 65.
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