German Investment in Ireland and in the Central and East European Countries

The accession of Central and Eastern European countries (CEECs) to the EU is expected by many to lead to the diversion of foreign direct investment towards the CEECs and away from other EU countries. The following paper focuses on the investigation of the internationalisation strategies and location choices of German multinational corporations (MNCs) in manufacturing against the background of growing regional economic integration, and particularly the fifth EU enlargement. It draws on the findings of a case study and interview results covering three German MNCs and their location choices for investment in both Ireland and the new EU member countries from Eastern Europe. This research project has been co-funded by the RIA in Dublin and DAAD. A first version of this work was presented at the September 2005 Irish Academy of Management Annual Conference in Galway.     

Trade and Market Liberalisation in Eastern Europe

SUMMARY

The question of why multinational companies (MNCs) choose to locate in one region rather than another has been an important topic in IB research for many years, but has recently received even more attention. This paper presents the results of an econometric investigation of the locational determinants of Italian firms in Central and Eastern Europe. Italian firms have been very active investors in the CEE countries. Our results broadly confirm the findings of previous studies, but we also find that both trade liberalisation and market liberalisation are important influences upon the location decision. If the CEE governments wish to attract further (Italian) foreign investment, then further liberalisation of their domestic economies should be a policy priority.     

Internationalization of Japanese Multinational Corporations in Central and Eastern Europe

Abstract

The paper focuses on the internationalization activities of Japanese MNCs in Central and Eastern Europe (CEE) analyzing data on national level considering Japan's modes of market entry in the CEE region and some of the countries in it. Major trends and the development of Japanese internationalization in CEE are presented. Individual mini case studies contribute to the analysis using the experience of several major Japanese MNCs that have invested in the region. The goal of the paper is to uncover the specifics of the internationalization process of Japanese corporations in the CEE region. Main characteristics of the penetration of Japanese MNCs in CEE are unveiled and discussed in the concluding part of the paper. The management implications and conclusions from the study are discussed further in the final part of the paper.     

Multinational corporations in Eastern Europe: Welcome trade partners or unwelcome change agents?

In the last two decades, trade between Eastern Europe and the West has grown remarkably. The multinational corporations (MNCs) have played a prominent role by offering the welcome trade benefits of technology transfer, financial and credit resources, and marketing expertise. The MNCs, however, also represent a threat as unwelcome change agents in numerous areas of trade, management, cultural change, and economic functions. Evidence is presented supporting the proposition that the traditional hostility and attitudes of restraint among Eastern bloc countries toward MNCs will have to be tempered. If not, these countries may find themselves squeezed out of the new types of trade and competition emerging in the 1980s between the developed world and nontraditional markets.     

河北省与中东欧国家中医药合作研究

近年来,中医药逐步走出国门,走向世界,在应对全球新型冠状病毒的防控阻击战中发挥的独特作用,更是让中医药在全球得到广泛关注。随着中国同中东欧国家在中医药领域交流合作日益深化,河北省应借力"一带一路"平台寻求与中东欧中医药合作的新机遇。首先介绍河北省与中东欧国家中医药合作现状,然后点明双方中医药合作具有潜力大且政策支持力度强的有利条件,进一步分析出双方中医药合作面临的问题:中医药国际标准不健全、专业复合型人才短缺、合作国家不均衡且合作模式单一,进而为促进河北省中医药产业快速发展,推动与中东欧国家深化合作提出相应的对策建议。     

Is the EU's labour market threatened by a wave of immigration?

As the accession negotiations continue between the European Union and the Central and Eastern European Countries, Germany in particular fears that granting free movement of labour to these countries might generate a wave of new entrants that could overwhelm its labour market. The following article uses migration determinants and draws on previous experience of integrating countries into the EU in an attempt to reach conclusions about migration patterns that may result from the forthcoming eastward enlargement.     

Export‐led growth and its determinants: Evidence from Central and Eastern European countries

In this study, we assess the importance of exports and global value chain (GVC) participation for economic growth. Using novel methods and an extensive data set, we decompose GDP growth in the Central and Eastern European countries (CEECs) to show that in a large part of the period of transition and integration with the EU, exports have played a predominant role in shaping economic growth. We also show that exports have been the major factor driving the convergence of the CEECs with their advanced counterparts. We employ panel methods to analyse the determinants of growth of exported value added and show that the major growth drivers in the analysed period of 1995–2014 are GVC participation, imports of technology and capital deepening.Jel classificationC23, F21, O33     

The Emerging Securities Market in Russia

Abstract

This paper examines the motivations of foreign firms for investing in the Eastern and Central European countries, based on a synthesis of surveys of investors and on anecdotal observations. The findings of this examination are used as a framework within which policies towards FDI are formulated and evaluated. It suggests that the efforts of Eastern and Central European governments should be directed towards the improvement of the conditions which affect investment driven by market, export and efficiency seeking motivations. These are the areas in which the region seems to have large potential as host for FDI that has not fully materialized yet.     

中国与中东欧16国贸易效率和潜力研究——基于非效率项随机前沿引力模型

贸易效率和贸易潜力是衡量国际贸易有效程度、确定未来贸易发展方向的重要指标。基于非效率项随机前沿引力模型,分别在"16+1"和"16+1+10"背景下测算了中国与中东欧16国的贸易效率和潜力,结果表明:中国与中东欧国家的双边贸易效率较高,但贸易潜力不显著;中国对中东欧国家的出口贸易效率低于双边贸易效率,出口贸易潜力超过双边贸易潜力;出口贸易潜力在"16+1+10"背景下较"16+1"背景下有显著提高。由此,提出进一步落实"16+1"合作机制、扩大进口、改进交通运输设施的建议,以期实现贸易潜力,提高贸易效率。     

Entering central and eastern Europe: Risks and cultural barriers

Scholars have argued that the slow pace of Western investment in Central and Eastern Europe may be caused by two entry barriers: cultural influences and high international risks. This study examines the influence of culture and international risks on the entry mode choices of Western European firms entering Central and Eastern European markets since the fall of the Iron Curtain in 1990. Evidence from 227 Western European companies shows that, for firms entering Central and Eastern Europe, investment risk perceptions are important determinants of mode choice while culture and contractual risk have only minimal influence. Managerial implications are also discussed. © 1998 John Wiley & Sons, Inc.     

Enlargement and the Textiles,Clothing and Footwear Industry

The textiles, clothing and footwear (TCF) industry is a labour intensive industry, strongly determined by globalization and easy relocation to low‐cost countries. Hence also in the European Union this industry is relatively more important in the low‐wage regions of the EU‐Southern periphery. With the envisaged enlargement, however, these countries fear a further shift of the sector to Central and Eastern Europe as these countries still have a comparative advantage in terms of low labour costs. The present article investigates whether this fear is justified, looking at three main aspects: first at the position and history of the TCF sector in the European Union and its role in the EU periphery, second at the sector in the Central and Eastern accession countries, and third at gobalization issues. The second aspect is dealt with in great detail, as development trends in the Central and East European countries are important and telling. Much has happened during the 15‐year (and more) period between the collapse of communism and the EU membership in this region, most important the integration to the EU by the means of trade, in particular outward processing trade. These developments mainly seem to determine future trends in an enlarged Europe. Overall however, future prospects have to be seen in a global context, strongly influencing the sector via changes in global trade policies.     

Trade and migration flows between some CEE countries and the UK

The recent enlargement of the European Union (EU) has enhanced interest in the causes and also the consequences of migration between Central and Eastern European (CEE) and Western European countries. This paper considers the possibility that some of these consequences make themselves felt in the trade flows between migrants' countries of origin and destination. Using a panel of data covering a number of CEE countries between 1996 and 2003, we employ an augmented gravity model to examine the effects of immigration from these transition countries on their bilateral trade flows with the UK. We pay attention to a number of issues that have been raised within the literature on gravity models. We find evidence that migration positively enhances the bilateral exports of the migrants' home country; however, there is less (but some) evidence that the imports from their destination country are also enhanced.     

No Risk,No Fun? Foreign Direct Investment in Central and Eastern Europe

In the course of transition from planned economies to market economies, foreign direct investment played an important role and contributed to international economic integration in Central and Eastern Europe. This paper investigates the determinants of FDI in Central and Eastern Europe, a region which in large part still lacks strong institutions. The empirical analysis presented in this article fi nds evidence that country default risk is not necessarily a hindrance to FDI. In contrast, factors like market size, labour cost and trade liberalisation do matter for FDI engagement in the region.     

Infrastructure Endowment and Corporate Income Taxes as Determinants of Foreign Direct Investment in Central and Eastern European Countries

This paper analyses the importance of taxes on corporate income and production‐related tangible infrastructure as determinants of foreign direct investment (FDI) in Central and Eastern European countries (CEECs). We operationalise taxes using effective average tax rates on the bilateral level and employ indices derived from principal component analysis as a proxy for the infrastructure endowment. In the empirical analysis we control for a possible interrelation between taxes and infrastructure as determinants of FDI – an issue usually neglected in the literature. Specifically, a favourable infrastructure endowment may compensate for relatively high taxes. Hence, higher taxes may not deter FDI. The results from our panel econometric analysis of bilateral outward FDI flows of seven home countries in eight CEECs for the 1995–2004 period in an augmented gravity model setting show that (i) both taxes and infrastructure play a role in the location decisions made by multinational enterprises; (ii) telecommunication and transport infrastructure are of special significance to FDI; and (iii) the tax‐rate sensitivity of FDI indeed decreases with the level of infrastructure endowment.     

Eu widening to the East: Must latin America be concerned?

The pending widening of the European Union to the East has revived concerns in Latin America that its trade and foreign direct investment relations with the EU may suffer as a result. Trade patterns suggest, however, that Latin America's exports to the EU are complementary to the exports of Central and Eastern European countries and the new investment opportunities in Central and Eastern Europe appear to be inducing additional foreign direct investment, rather than causing its diversion.     

Eastern-Western supplier-customer relationships in agricultural machinery industry: results of an empirical investigation in the Czech Republic,Hungary, Romania,Ukraine, and Germany

International trade between Germany and the young reform states in Central and Eastern Europe is growing rapidly. Germany is the most important trading partner for nearly all of the Central and Eastern European countries. Nevertheless, there are relatively few empirical studies concerning purchasing activities of western manufacturers in Central and Eastern Europe. Especially the characteristics of successful relationships between Central and Eastern suppliers and their western customers have not been addressed. This paper presents results of a survey carried out in the Czech Republic, Romania, Hungary, Ukraine and Germany. The research reported, contributes towards answering the following research questions. (1) What are the reasons for establishing Eastern-Western supplier-customer relationships? (2) What are the characteristics of German customers buying in Central and Eastern Europe? (3) Which attributes are prominent by Eastern suppliers? (4) What are the ingredients of a successful supplier-customer relationship?The survey showed that many successful relationships between German manufacturers and Central European suppliers have been established. The importance of these relationships for both suppliers and customers is shown by the average share of materials by value bought in Central and Eastern Europe, the high specificity of the purchased materials, the types of contracts employed, and the extent of support activities. Furthermore, the study has identified the requirements and numerous attributes of successful Eastern-Western supplier-customer relationships.     

An empirical analysis on the determinants of CEE government bond spreads

This paper studies the spread between 10 year Euro denominated Central and Eastern European (CEE) government bonds and their German counterpart. With newly available time series, regressions are run for each country separately in order to deliver a first insight into the underlying determinants. While higher ECB reference rate and market volatility increase bond spreads and turn out to be the main driving factors, there is no common pattern of macroeconomic fundamentals, pointing to strong heterogeneity within the CEE region. Overall, market variables are more significant than fundamentals during 1999 to 2007.     

Impact of ownership and location factors on service multinationals' internalisation

Foreign direct investment in the service sector has been gaining importance in the past decade as more countries transform themselves into post-industrialised economies. The transition from a centrally planned economy to market-based economy has generated a surge of foreign direct investment from industrialised countries to Central and Eastern European Countries. This paper examines the impact of ownership and location factors on the extent of internalisation for service multinationals seeking to enter into the Czech Republic, Hungary, and Poland, as these countries launch their economies towards increased privatisation, deregulation, and liberalisation. Using foreign direct investment data of 76 firms during 1990–2000, we find significant support for our main hypotheses.     

Regionalization in Central and Eastern Europe

SUMMARY

Regional players among the MNCs operating in Central and Eastern Europe have to decide if they should regard their businesses as a collection of individual markets or as a homogeneous region. The purpose of this paper is to examine if and how regionalization concepts have actually been implemented by foreign MNCs in CEE. The analysis focuses on the preconditions for the emergence of a regional strategy, on the identification of the main areas of regional integration, and the relationship between strategy and organizational structure. By using a longitudinal case study approach a better insight is gained on how regional strategies have emerged during the internationalization process of the firm and, if they have emerged, in which way they have manifested themselves in business decisions. The findings raise new questions about the regionalization construct with regard to the operationalization of regionalization, the relationship between strategy and structure, and its applicability to services.     

外商投资的技术转移、技术外溢及其结构差异--以福建外商直接投资计量模型分析为例

外商投资的技术外溢程度与其技术转移水平呈现倒U型函数关系,只有在一定阀值范围之内,跨国公司所转移技术对东道国的外溢效应才是积极的、正向的,否则就会产生负外溢效应或外溢效应减弱。福建三资企业技术外溢的计量模型分析也表明,由于技术转移阀值的存在,造成来自不同国家或地区外商直接投资的外溢效应具有明显的结构差异性。因此积极调整利用外资结构,提升外资企业的技术转移水平,对于增强外商直接投资的外溢效应具有重要意义。