The External Sector, the State and Development in Eastern Europe

Barry Eichengreen and Richard Kohl

No 1904, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The countries of Central and Eastern Europe have displayed widely disparate trade performance since the beginning of the transition. The Czech Republic and Hungary have had some success moving into the production and export of more technologically-sophisticated, higher value-added goods, while Bulgaria and Slovakia have continued to specialize, sometimes increasingly, in low-skill, low-value-added goods. Poland and Romania are intermediate cases. In Poland, different parts of the economy show each of these tendencies. In Romania, performance is very different in different periods – significantly better after 1994 than before. In accounting for these patterns, our analysis points to the importance of direct foreign investment (DFI) and outward processing trade. DFI has been an engine of technological and organization learning, but it has been significant only in the Czech Republic, Hungary and, most recently, Poland. Outward-processing trade (OPT) is widely spread and helps to explain the strong export performance of the region. The technological and organizational implications of OPT are, however, less obviously favourable: in particular, it does not encourage the development of differentiated, price-insensitive export products that offer countries insulation from foreign competition.

Keywords: Eastern Europe; Foreign Investment; outward processing trade; Transition (search for similar items in EconPapers)
JEL-codes: F1 F2 P2 P3 (search for similar items in EconPapers)
Date: 1998-06
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1904 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The External Sector, the State and Development in Eastern Europe (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:1904

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1904

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().