nep-tra New Economics Papers
on Transition Economics
Issue of 2012‒02‒08
five papers chosen by
J. David Brown
Heriot-Watt University

  1. Does economic convergence with the European Union mean more FDI flows to an economy? Analysis on 5 Central and Eastern Europe countries By Alexe, Ileana; Tatomir, Cristina F.
  2. Trends in Entrepreneurial Activity in Central and East European Transition Economies By André van Stel; J. Cieslik Cieslik
  3. Chinese Market Access Barriers of U.S Oilseeds and Grains By Yeboah, Osei; Appiah-Danquah, Gloria
  4. Eyes on Romania: what to look when investing here? By Tatomir, Cristina F.; Popovici, Oana
  5. Foreign direct investment in provinces: A spatial regression approach to FDI in Vietnam By Esiyok, Bulent; Ugur, Mehmet

  1. By: Alexe, Ileana; Tatomir, Cristina F.
    Abstract: In this paper we analyze the relationship between economic convergence with the European Union (EU) and foreign direct investment flows to 5 EU countries (Bulgaria, Czech Republic, Poland, Romania and Hungary) in the period 2001 – 2010, in order to determine if the process of economic convergence with the EU level influences FDI inflows in these economies. We use an economic convergence index, made up of real and structural convergence indexes, to assess the level of economic convergence. The study does not provide us with a clear response to our question. We report a tight relationship between convergence index and FDI inflows in Bulgaria, but quite divergent evolutions of the two variables in the case of Hungary.
    Keywords: convergence index; foreign direct investments; European Union
    JEL: F15 F23 F43
    Date: 2011–10
  2. By: André van Stel; J. Cieslik Cieslik
    Abstract: After 1989, radical changes in the level of entrepreneurial activity have taken place in the Central and East European (CEE) region countries, transitioning from the communist to a market economy system. In this paper we explore these developments at the macro level of countries. In particular, we investigate developments in business ownership rates in four CEE transition economies (Czech Republic, Hungary, Poland and Slovak Republic) in the period 1989-2008, and compare them with developments in other OECD countries. To this end we make use of EIM’s COMPENDIA data base, which contains harmonized data on the number of business owners in OECD countries. Data for the four CEE region countries under consideration have recently been added to COMPENDIA. Our analysis reveals that, since the fall of the Berlin Wall in 1989, business ownership rates in the four CEE countries have been converging rapidly towards the levels of other OECD countries, and more specifically, Western European countries. This shows that the communist system did not have prolonged negative effects on the private business sector in these four countries. Instead, based on their institutional and cultural roots, or ‘civilization fundamentals’, these CEE countries were able to rebuild the entrepreneurial sector in a relatively short period of transition. Finally, in spite of the general trend of convergence towards Western European countries, we also find sizable differences among these four CEE countries in the level and development of business ownership since 1989.
    Date: 2012–01–23
  3. By: Yeboah, Osei; Appiah-Danquah, Gloria
    Abstract: China was admitted into the WTO in December 2001 and this raised the hopes of the US that China will open up to agricultural trade with the US. However, this potential has not been realized. The goal of this study is to determine the impacts of trade impediments and barriers of the market access of US oilseeds and grains in China. A market access variable that was obtained by dividing the total value of U.S soybean and corn exports to China by U.S agricultural G.D.P was regressed on Chinaâs per capita income, exchange rate of the yuan to the dollar, arable land to labor ratio in the U.S and a dummy variable representing Chinaâs WTO accession. The result found per capita income to have a positive impact on market access of U.S oilseeds and grains in China. Exchange rate of the yuan to the dollar was found to be significant and has a negative impact on market access. However, Chinaâs WTO accession and the arable land to labor ratio in the U.S did not have any significance on the market access of U.S oilseeds and grains.
    Keywords: Market Access, Market Access Barriers, U.S Oil seeds and Grains, Import, International Development, International Relations/Trade,
    Date: 2012
  4. By: Tatomir, Cristina F.; Popovici, Oana
    Abstract: In this paper we identify a framework of the main macroeconomic indicators an investor must look when investing in a country, depending on his activity business sector. Using a qualitative method of research on the Romanian case in period of 2000-2010, we establish that a series of leading indicators, as Gross Domestic Product (GDP) growth rate, inflation rate and industrial production, are appropriate to get a brief snapshot of the economic outlook of a country. The following period, since 2011 to 2014, confirm our results. Beside the traditional indicators, we set as significant the degree of business cycles synchronization with the European Union (EU) in order to predict the next path of the Romanian economy. We use a structural divergence index for assessing the similarity of economic structure between Romania and EU. The results of this study confirm that Romania lags behind EU, offering the possibility to decide the next step of an investor’s business strategy.
    Keywords: foreign direct investment; leading indicators; business cycles synchronization
    JEL: E31 F21 F41
    Date: 2011–10
  5. By: Esiyok, Bulent; Ugur, Mehmet
    Abstract: Foreign direct investment (FDI) flows into Vietnam have increased significantly in recent years, with unequal distribution between provinces and regions. We aim to contribute to the literature on locational determinants of FDI by accounting for spatial interdependence between 62 Vietnamese provinces from 2006-2009. For this purpose, we estimate a spatial lag model using maximum likelihood estimation method. We report existence of spatial dependence between provinces as well as spatial spill-over effects. The results are robust to different specifications for weight matrices and inclusion of different explanatory variables and/or proxies. We also report that conventional determinants of FDI such as market size, domestic investment, openness to trade, labour cost, education and governance, etc. are significant and remain robust to inclusion of spatial interdependence. The sign of the spatial dependence suggests that the distribution of FDI between provinces is subject to conglomeration effects.
    Keywords: Foreign direct investment; spatial dependence; conglomeration; Vietnam
    JEL: R12 F21 C31
    Date: 2011–12–20

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