EU enlargement and consequences for FDI assisted industrial development

Rajneesh Narula and Christian Bellak

No 2008-067, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

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.

Keywords: FDI; European Union; MNEs; multinationals; absorptive capacity; globalization; industrial development; EU enlargement; foreign investment; direct investment (search for similar items in EconPapers)
JEL-codes: F02 F23 O14 O19 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Working Paper: EU enlargement and consequences for FDI assisted industrial development (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2008067

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