The Central and Eastern

European countries’ progress

in their transition to market

economy

Petya Aladzhova

School of Economics &

Management

Southeast University, China

Outline

• Introduction

• Key Literature Reference

• Research Questions

• Methods

• Results/Conclusion

• References

Introduction

• Analysis of the differences in the

process of accumulating foreign

direct investment (FDI) inflows.

• The relationship between

transition economies and

privatization and their link with

foreign direct investment inflows.

Key Literature Reference

• The Importance of Transition for

Economics: “Washington

Consensus” and “Post-

Washington Consensus”

approaches.

• Theoretical study on the influence

factors of FDI on Central and

Eastern European countries.

Research Questions

• Which are the reasons that cause

the differences among the FDI

inflows in Central and Eastern

European countries?

• Which factor play a greater

influence on the FDI of transition

countries?

Methods

• Qualitative analysis

• Analysis on the main factors

influence on FDI in Central and

Eastern European countries.

• Study on the relationship between

FDI and Multinational companies

(MNCs).

Sample

Poland and the Czech

Republic

• The volume of inward FDI

• Characteristics of FDI in Central

and Eastern European countries

The Volume of Inward FDI

Source: UNCTAD, http://unctad.org/wir or http://unctad.org/fdistatistics.

0

5000

10000

15000

20000

25000

FDI inflows 1990 - 2012(millions of dollars)

Poland

0

50

100

150

200

250

300

350

400

450

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

Poland: Total Privatization Revenues and Transactions

Public Offers (US$mil) Private Sales (US$mil) Transactions

Privatization

Source: www. privatizationbarometar.net

Source: www. privatizationbarometar.net

0

20

40

60

80

100

120

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

The Czech Republic: Total Privatization Revenues and Transactions

Public Offers (US$mil) Private Sales (US$mil) Transactions

Results/Conclusion

• Volatility of the privatization

program

• Location

• Market potential

• The political and legal factors

• The reason that causes the

difference among the foreign direct

investment in the CEE countries:

fundamentals and the Host

Government and Investor decision.

• Factors playing a greater influence

on the FDI of transition countries:

the entry mode, the industry and

the investor decision.

References

• Williamson, John, “What Washington Means by Policy Reform,”

Williamson, John (ed.): Latin American Adjustment: How Much has

Happened, Washington: Institute for International Economics, 1989.

• A. Bevan and S. Estrin ，“Determinants of foreign debt investment

in transition economies, ”WD l working paper, no 342, 2000.

• A. Bevan and S. Estrin , "The determinants of FDI into European

transition economies”, Journal of Comparative Economic 32., pp

775—787, 2004.

• Barrel R D Holland, “Foreign direct investment and enterprise

restricting in Central and Eastern Europe, Economies of transition,”

2000.

• Barbell，Ray and Holland，Dawn，“Foreign Direct Investment in

Central European Manufacturing , ”In M．Weresa，”Foreign Direct

Investment in Transition Economies. “The Polish Case,” 2000.

• Alessandfini Sergio，”The EU Foreign Direct Investments in Central

and Eastern Europe,” Dott．A Giuffr'e Editore，Milano, 2000.

Thank you for your attention!