TY  - JOUR
AU  - Lipsey,Robert E.
TI  - Measuring the Impacts of FDI in Central and Eastern Europe
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12808
PY  - 2006
Y2  - December 2006
UR  - http://www.nber.org/papers/w12808
L1  - http://www.nber.org/papers/w12808.pdf
N1  - Author contact info:
Robert E. Lipsey
NBER
365 Fifth Avenue, Suite 5318
New York, NY 10016-4309
Tel: 212/817-7961
Fax: 212/817-1597
E-Mail: N/A user is deceased
M3  - presented at "Disability Project Meeting", December 14, 2006
AB  - The impacts of inward FDI on host countries are frequently studied using balance-of-payments based measures of flows and stocks.  These are unreliable for the purpose because, while theories of the effects of investment are based on FDI production and employment in the host country, these measures are often distorted approximations of the location of real activity.  The mismeasurement  is particularly important if trade openness, often associated with FDI, is treated as a control variable. The countries of Central and Eastern Europe, a very minor object of US direct investment, have, since 1990, become a major location for FDI from Europe, especially from Germany. The investments from both the US and Germany are, on average, very labor-intensive, and are heavily concentrated in Motor Vehicles.  One result has been a shift in the export comparative advantage of these countries toward the machinery and transport equipment sector. Microdata studies in the CEE countries have found that foreign participation is associated with higher productivity in the affiliates themselves.  Spillovers to indigenous firms are more spotty, clearer to upstream suppliers than to firms in the same industries as the affiliates.
ER  -