Central And Eastern Europe Fdi On The Growth Of The Industrial Structure And Economic Impact Studies

Under the backgroud of accerlating globalization,Central and Eastern Europeancountries (CEEs) have gone through large scale Foreign Direct Investment (FDI)inflow,which has unique sectoral distribution due to its special economy backgroundand development paths.FDI has been an important source of capital formation,meanwhile it has profound impact on the structure of output,employment,trade aswell as economic growth.This dissertation focus on studying the relationship betweenFDI,industrial structure and economic growth.Based on the evolution theory,â… analyze the determinants of FDI inflow in CEEs,then analyze the industrialdevelopment and the relationship between FDI and ecomomic development.In 2008 the global financial crisis had profound impact on CEEs,crisis broke outin some countries.Based on the latest data,â… analyze the relationship between FDI inbanking sector and macro-economic stability,and present my personal opinion.Themain conclusions are as following:1.No matter from the output and employment perspective,CEEs has entered in thestage where service industry plays the dominant role.CEEs' comparative advantagein labor intensive products has faded off,while the technology intensive products hasgained comparative advantage.2.The increase of FDI in manufacturing industry does not contribute obviouslyto economic growth.As an important intermediary products FDI in service industryespecially in financial industry plays an important role in promoting economic growth.FDI indeed contributed a lot to the upgrading of industrial structure,in particular,thesectoral distribution of inward FDI has large impact on industrial structure.3.Inflow of FDI does not boost the scale of employment but alters the structure ofemployment,that is increasing the share of service employment and decreasing theshare of manufacturing employment.The upgrading of employment structure does notnecessarily leads to the increase of sale of employment.4.The entry of foreign banking increase the credit supply,and broaden thesources of financing for host countries.The large amount of FDI and the financialliberalization process improves the international financial integration of CEEs,whichimprove the financing ability of CEEs.The result is most of the countries hasincreased their foreign debt and current account deficit scale,which,combined with the mismatch of currency,has caused huge risk for CEEs.There are 8 chapters in total,the basic structure are as following:The Introduction part explains the meaning of the theme and introduced theresearch method,main contents,contribution and shortcomings of the dissertation.Chapter 1 is the review of literature,which includes the industrial evolutiontheory,the conditions and other variables that affect industrial upgrading.Chapter 2 analyzed the determinants of FDI in CEEs,including the ordinaryfactor and the unique factor related with transition.Since most of the inward FDIcome from the old EU member countries,this chapter also analyzes the taxcompetition effect on FDI within a theoretical frame.Chapter 3 sortes the basic theory related with FDI and industrial evolution.Fromthe basic model of industrial evolution,then introduces FDI and industrial evolution,based on these models,â… draw the six mechanisms through which FDI contributes tothe upgrading of industrial evolution.Chapter 4 analyzes the development and changes in industrial structure in CEEssince transition,focusing on analysis of value-added,labor productivity,employment,trade and other economic indicators.In the last part of this chapter,â… take autoindustry as an example and analyze the effect of FDI on industrial restructuring andindustrial development.Chapter 5 analyzes empirically of FDI on output structure and FDI on economicgrowth.In this chapter,FDI is classified according to their technology intensity.Andâ… analyze the relationship between the technology structure of FDI with the laborproductivity and economic growth.Chapter 6 analyze the relationship between FDI and employment,and explainsthe phenomenon where economic growth is couples with stagnant employmentgrowth.Chapter 7 studies the effect of banking sector FDI on credit resource allocationand macro economic stability.The last part analyzes the scale of current accountdeficit and foreign debt and their relationship with the crisis.Chapter 8 concludes the whole dissertation and presented my personal suggestionfor China in attracting FDI.