20 years in the European Union, Foreign direct investments and the process of integration

Magdolna Sass

No 277, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: Foreign Direct Investment played a crucial role in the economic transition of the post- socialist countries. EU membership prospects positively affected FDI inflows in the nineties and the integration process promoted FDI directly and indirectly as well, through enterprise restructuring, labour market impact, sectoral reforms, regulatory quality, rule of law, and specific aspects of the business environment. FDI flows added new, competitive capacities and technologies to the region, however, FDI-related benefits remained below the expectations. The Central and East-European countries could mainly offer their low wages in the intra-EU distribution of production and most of them lacked competitive local firms. These economies based their growth strategies on FDI and it still plays a determining role, especially in certain export-oriented sectors.

Keywords: FDI; European Union; New Member States (search for similar items in EconPapers)
JEL-codes: F2 P33 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2024-11
New Economics Papers: this item is included in nep-fdg and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:iwe:workpr:277

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