Functional and Sectoral Division of Labour within Central and Eastern European Countries: Evidence from Greenfield FDI

Tinbergen Institute Discussion Paper 14-041/VII

18 Pages Posted: 30 Mar 2014

See all articles by Teodora Dogaru

Teodora Dogaru

A Coranu University

Martijn J. Burger

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Bas Karreman

Erasmus Research Institute of Management (ERIM); Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Tinbergen Institute

Frank G. van Oort

University of Utrecht

Date Written: March 28, 2014

Abstract

In this paper, we analyse the sectoral and functional division of labour in Central and Eastern European (CEE) regions within the convergence debate. By analysing the investment decisions of multinational corporations in 49 NUTS-2 regions across 6 European CEE countries (Poland, Czech Republic, Slovakia, Hungary, Romania, and Bulgaria), we show that capital city regions not only receive more greenfield FDI but also attract a larger variety of investments in terms of sectors and functions. Capital cities are more likely to host higher-end sectors and functions, which provides an explanation for the existing regional disparities within CEE countries. These results highlight the importance of functional and sectoral divisions of labour in the view of regional profiling and contribute to the recent EU Cohesion Policy debate.

Keywords: regional disparities, Central and Eastern Europe, greenfield FDI

JEL Classification: F23, R12, R58

Suggested Citation

Dogaru, Teodora and Burger, Martijn J. and Karreman, Bas and van Oort, Frank, Functional and Sectoral Division of Labour within Central and Eastern European Countries: Evidence from Greenfield FDI (March 28, 2014). Tinbergen Institute Discussion Paper 14-041/VII, Available at SSRN: https://ssrn.com/abstract=2417250 or http://dx.doi.org/10.2139/ssrn.2417250

Teodora Dogaru (Contact Author)

A Coranu University ( email )

Coruña
Spain

Martijn J. Burger

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burg. Oudlaan 50
Rotterdam, NL 3062 PA
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Bas Karreman

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Tinbergen Institute ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Frank Van Oort

University of Utrecht ( email )

Vredenburg 138
NL-3508 TC Utrecht, 3511 BG
Netherlands

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