China and Central and Eastern European Countries : Regional Networks, Global Supply Chain, or International Competitors?
China has emerged as one of the top recipients of foreign direct investment in the world. Meanwhile, the successful transition experience of many Central and Eastern European countries has also allowed them to attract an increasing share of global...
| Main Authors: | , , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/08/9755730/china-central-eastern-european-countries-regional-networks-global-supply-chain-or-international-competitors http://hdl.handle.net/10986/6809 |
| Summary: | China has emerged as one of the top
recipients of foreign direct investment in the world.
Meanwhile, the successful transition experience of many
Central and Eastern European countries has also allowed them
to attract an increasing share of global foreign direct
investment. In this paper, the authors use a panel data set
to investigate whether foreign direct investment flows to
these two regions are complements, substitutes, or
independent of each other. Taking into account the role of
host country characteristics - such as market size, degree
of trade liberalization, and human capital - the authors
find no evidence that foreign direct investment flows to one
region are at the expense of those to the other. Instead,
the results suggest that foreign direct investment flows are
driven by distinct regional production networks (and thus
are largely independent of each other) and the development
of global supply chains (indicating that foreign direct
investment flows are complementary). |
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