The Value of Diversity: Foreign Direct Investment and Employment in Central Europe During Economic Recovery

Transnational Corporations, Vol. 12, No. 1, pp. 53-90, 2003

43 Pages Posted: 4 Aug 2003 Last revised: 5 Sep 2010

See all articles by Urmas Varblane

Urmas Varblane

University of Tartu - Faculty of Economics and Business Administration

Tomasz Mickiewicz

Aston University - Aston Business School

Slavo Radosevic

University College London - School of Slavonic and East European Studies

Date Written: 2002

Abstract

We examine the role of FDI in job creation and job preservation as well as their role in changing the structure of employment. Our analysis refers to Czech Republic, Hungary, Slovakia and Estonia. We present descriptive stage model of FDI progression into transition economy. Employment aspects of the model are next analysed. We conclude that the role of FDI in employment creation/preservation has been most successful in Hungary and than in Estonia. Yet, FDI can operate as complement rather than as substitute in employment generation/preservation. The paper shows that the increasing differences in sectoral distribution of FDI employment across countries are closely related to FDI inflows per capita. The bigger diversity of types of FDI is more favourable for the host economy. There is higher likelihood that it will lead to more diverse types of spillovers and skill transfers. If policy is unable to maximise the scale of FDI inflows than policy makers should focus much more on attracting diverse types of FDI.

Keywords: Foreign Direct Investment, Employment, Economic Recovery, CEE

JEL Classification: F21, J23

Suggested Citation

Varblane, Urmas and Mickiewicz, Tomasz Marek and Radosevic, Slavo, The Value of Diversity: Foreign Direct Investment and Employment in Central Europe During Economic Recovery (2002). Transnational Corporations, Vol. 12, No. 1, pp. 53-90, 2003, Available at SSRN: https://ssrn.com/abstract=418541 or http://dx.doi.org/10.2139/ssrn.418541

Urmas Varblane

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Road 4 - A226
Tartu
Estonia
+372 7 376 361 (Phone)
+372 7 376 327 (Fax)

Tomasz Marek Mickiewicz (Contact Author)

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, B47ET
United Kingdom

Slavo Radosevic

University College London - School of Slavonic and East European Studies ( email )

Malet Street
London WC1E 7HU
United Kingdom

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