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MNE’s Regional Location Choice - A Comparative Perspective on East Germany, the Czech Republic and Poland

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  • Gauselmann, Andrea
  • Marek, Philipp
  • Angenendt, Jan Philipp

Abstract

The focus of this article is the empirical identification of factors influencing Foreign Direct Investment (FDI) in transition economies on a regional level (NUTS 2). The analysis is designed as benchmark between three neighboring post-communist regions, i.e. East Germany, the Czech Republic and Poland. Their different transition paths have not only resulted in economic differences. We can also observe today that the importance of pull factors for FDI varies significantly across the regions. This analysis shows that in comparison with Poland and the Czech Republic, East Germany's major benefit is its purchasing power, its geographical proximity to West European markets, and its modern infrastructure. Furthermore, the analysis suggests that intra-industry linkages such as specialization and agglomeration economies are relevant factors for the location decision of foreign investors. This result can help to explain the regional divergence of FDI streams in transition economies.

Suggested Citation

  • Gauselmann, Andrea & Marek, Philipp & Angenendt, Jan Philipp, 2011. "MNE’s Regional Location Choice - A Comparative Perspective on East Germany, the Czech Republic and Poland," IWH Discussion Papers 8/2011, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:iwh-8-11
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    multinational enterprises; international business; regional economic activity: growth; development; and changes; discrete choice; Multinationale Unternehmen; regionalökonomische Aktivitäten: Wachstum; Entwicklung und Wandel; diskrete Regressionsmodelle;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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