IRMO Occasional Papers\ FDI, Structural Change and Productivity Growth: Global Supply Chains at Work in Central and Eastern European…

FDI, Structural Change and Productivity Growth: Global Supply Chains at Work in Central and Eastern European Countries, IRMO Occasional Papers, 1/2013

In this paper the authors Jože Damjan, Črt Kostevc and Matija Rojec, from Institute for Economic Research, Ljubljana, Slovenia, empirically test the importance of the ‘global supply chains’ concept for export restructuring and productivity growth in Central and Eastern European Countries (CEECs) in the period 1995-2007. Using industry-level data and accounting for technology intensity, the authors show that FDI has significantly contributed to export restructuring in the CEECs. The effects of FDI are, however, heterogeneous across countries. While more advanced core CEECs succeeded in boosting exports in higher-end technology industries, non-core CEECs stuck with export specialization in lower-end technology industries. This suggests that question towards which industries FDI flows have been directed, is of key importance.

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