The European Flying Geese: New Fdi Patterns for the Old Continent?

Research in International Business and Finance, Vol. 18, No. 1, pp. 27-49, April 2004

Posted: 26 Jan 2006 Last revised: 23 Jan 2009

See all articles by Kalman Kalotay

Kalman Kalotay

United Nations Conference on Trade and Development (UNCTAD); UNCTAD

Abstract

This article attempts to apply the flying geese metaphor to emerging foreign direct investment (FDI) patterns in Europe and the Mediterranean. Such a division of labour is at best at a nascent stage, given the overwhelming share of Western Europe in both inward and outward foreign direct investment flows. Because of these imbalances, special attention is to be paid to Central and Eastern Europe's (CEE) potential, both in the group joining the European Union (EU) in 2004 and the rest of the subregion. For the former, middle-income countries, risks in investment promotion are related to uncertainty brought about by the transition to European Union's acquis and an eventually too fast increase in production costs. Policy response to that requires a modernisation of both general and specific investment promotion policies, adjusted to the rules of the Union. For the rest of Central and Eastern Europe, the challenge is to adjust to the enlarged European Union and to improve the business and investment environment, in order to capture the foreign direct investment outflows of other European countries searching for optimum labour costs.

Keywords: Foreign direct investment, Europe, Enlargement, Flying geese metaphor

JEL Classification: F23, O14, F02, O52

Suggested Citation

Kalotay, Kalman, The European Flying Geese: New Fdi Patterns for the Old Continent?. Research in International Business and Finance, Vol. 18, No. 1, pp. 27-49, April 2004. Available at SSRN: https://ssrn.com/abstract=878045

Kalman Kalotay (Contact Author)

United Nations Conference on Trade and Development (UNCTAD) ( email )

Division on Investment, Technology and Enterprise
Palais des Nations
Geneva, 1211
Switzerland

UNCTAD ( email )

Division on Investment, Technology and Enterprise
Palais des Nations
Geneva, 1211
Switzerland

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