Foreign direct investment and employment in Central Europe

Slavo Radosevic, Urmas Varblane, Tomasz Mickiewicz

Research output: Contribution to journalArticlepeer-review

Abstract

This article investigates the effects of foreign direct investment on employment generation in Central Europe. Foreign affiliates operate as a buffer to reductions in overall employment and show significant cross-country differences. A model analyzing the contribution of foreign direct investment to restructuring is developed. This model helps interpret the empirical evidence on the link between foreign direct investment and employment in Central Europe. Increasing differentiation in employment between manufacturing industries dominated by foreign affiliates suggests the importance of diversified sources of foreign direct investment for employment generation and preservation. A disaggregate analysis indeed reveals a much more complex and differentiated role of foreign direct investment in employment preservation, employment generation and structural change than the aggregate picture would suggest. This diversity has important policy implications for attracting and upgrading foreign direct investment.
Original languageEnglish
Pages (from-to)53-90
Number of pages38
JournalTransnational Corporations
Volume12
Issue number1
Publication statusPublished - Apr 2003

Keywords

  • foreign direct investment
  • employment
  • Central and Eastern Europe

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