The Role of Foreign Direct Investment in the Economy

A key component of economic globalization, foreign direct investment (FDI) plays a special role in stimulating the growth of countries? competitiveness. This book provides a comprehensive insight into the relationship between foreign direct investment and economic growth, with a special focus on the countries of Central and Eastern Europe.

The empirical and theoretical studies included in the book describe the positive impact of foreign direct investment on long-term economic growth in both developed and developing countries. The book documents the extent of foreign direct investment and barriers to FDI in selected countries. It shows the positive growth effects of foreign direct investment, while noting that these effects are not guaranteed automatically. The book is a valuable source of information on foreign direct investment, especially in Central and Eastern Europe, and the business decision-making process in general.

List of contents

1;Contents;6
2;Chapter I;10
2.1;References;15
3;Chapter II;16
3.1;Introduction;16
3.2;2. Literature Review;19
3.2.1;2.1. Transmission channels between FSFDI and economic growth;19
3.2.2;2.2 Signals of Foreign Bank Entry;22
3.3;3. Analysis of Bulgaria and Croatia;28
3.3.1;3.1. Facts about the financial sector and FDI;28
3.3.2;3.2. Statistical Analyses;33
3.4;4. Conclusion;40
3.5;5. Agenda for further research;42
3.6;References;43
3.7;APPENDIX;49
4;Chapter III;56
4.1;Introduction;56
4.2;2. The role of institutional quality for international integration and competitiveness;57
4.3;3 Econometric Methodology;59
4.3.1;3.1 The specification;59
4.3.2;3.2 Data;61
4.4;4 Results;63
4.4.1;4.1 Gravity regressions;63
4.4.2;4.2 Robustness;66
4.5;5 Conclusions;68
4.6;References;68
5;Chapter IV;70
5.1;Introduction;70
5.1.1;1.1 The Economic Shifts Worldwide;70
5.1.2;1.2 Major Economic Data Revealing the Shift from the West to the East;72
5.1.3;1.3 Other Factors;74
5.1.4;2.1 Eurasian Railways and Economic Significance;77
5.2;Concluding Remarks;82
5.3;References;82
6;Chapter V;84
6.1;Introduction;84
6.2;2. Literature Review;85
6.3;3. Data and Descriptive Statistics;88
6.3.1;3.1 Data Sources and Variable Definitions;88
6.3.2;3.2. Descriptive Statistics;90
6.4;4. Methodology and Results;93
6.4.1;4.1. FGLS estimation;93
6.5;5. Conclusion;95
6.6;References;97
6.7;Appendix: Transition Countries in the sample;99
7;Chapter VI;100
7.1;Introduction;100
7.2;2. Foreign direct investment inflows to CEE countries;103
7.3;3. FDI productivity spillovers in local firms;106
7.4;4. Data description and analysis of foreign presence in the manufacturing sector;110
7.5;5. Estimation strategy;114
7.6;6. Estimation results;117
7.7;7. Conclusions;121
7.8;References;122
8;Chapter VII;134
8.1;Introduction;134
8.2;2. FDI, technology transfer and innovation: an interface;135
8.3;3. Knowledge creation by foreign-owned firms in Poland;137
8.4;4. Inflow of knowledge from abroad: assessment based on patent statistics;144
8.5;5. The impact of FDI on innovation in Poland: a regression analysis;145
8.6;6. Conclusions;148
8.7;References;148
9;Chapter VIII;151
9.1;Introduction;151
9.2;2. FDI evolution in Romania;154
9.3;3. The role of FDI in the manufacturing sector;155
9.4;4. Case study: FDI impact on human resources in the manufacturing sector;159
9.4.1;4.1 Result analyses and interpretation;160
9.5;5. Investment priorities and factors that influence FDI;170
9.5.1;5.1. Phase 2 - Interviews;171
9.6;6. Conclusions and recommendations;174
9.7;7. Future research;176
9.8;References;176
10;Chapter IX;179
10.1;Introduction;179
10.2;2. Structural characteristics of globalization;179
10.2.1;2.1 Foreign direct investment;180
10.3;3. International division of labor;180
10.3.1;3.1. International context;181
10.3.2;3.2. The structure and competitiveness of foreign trade;182
10.3.3;3.3. Quality of trade structure;183
10.4;4. Internationalization of research and development;188
10.4.1;4.1. International context;188
10.4.2;4.2. Fragmentation of multinational value chain;189
10.4.3;4.3 Foreign investment in knowledge-intensive activities;190
10.4.4;4.4 Knowledge-intensive activities of foreign companies;192
10.5;5. Conclusions;196
10.6;References;197
11;Chapter X;199
11.1;Introduction;199
11.2;2. Overview of FDI theories concerning technology transfer and diffusion35;200
11.2.1;2.1 Monopolistic advantages theory (S.H. Hymer);200
11.2.2;2.2 International product life cycle theory (R. Vernon);201
11.2.3;2.3 FDI internationalization theory;202
11.2.4;2.4 Localisation factors theory;202
11.2.5;2.5 "Eclectic" theory of international production (Eclectic foreign investment the-ory) (J.H. Dunning);202
11.2.6;2.6 Comparative advantages theory (K. Kojima);203
11.3;3. FDI - a channel of technology transfer;204
11.3.1;3.1 Classification of spillover effects;205
11.4;4. Measuring spillovers from FDI - methodology

About the author

Oskar Kowalewski holds a Ph.D. in economics. He is an assistant professor at the World Economy Research Institute of the Warsaw School of Economics (SGH). His research concentrates on banking, mutual funds, and comparative studies on financial systems. He has written and co-written many papers on financial system structures and domestic and multinational banking.

Marzenna Anna Weresa has a Ph.D. and a D.Sc. in economics. She works as a professor at the World Economy Research Institute of the Warsaw School of Economics (SGH), being the institute s director and head of the Postgraduate Study Program in Foreign Trade. Her research and academic teaching focus on international economics, in particular on issues related to innovation, technology transfer and foreign direct investment in the context of European integration as well as economic transition in Central Europe. She has authored and co-authored more than 60 books and numerous papers concerning innovation, technology transfer, foreign direct investment, and trade.

Product details

• Assisted by: Oskar Kowalewski (Editor), Marzenna A. Weresa (Editor)
• Publisher: Edition Rainer Hampp
• Languages: English
• Product format: Paperback / Softback
• Released: 14.01.2009
• EAN: 9783866183070
• ISBN: 978-3-86618-307-0
• No. of pages: 216
• Weight: 280 g
• Subject: Social sciences, law, business > Business > Economics