European Integration and Outward FDI from Central and Eastern Europe: Is There Any Evidence of Knowledge-seeking?

Björn Jindra, Sohaib S. Hassan, Jutta Günther, Uwe Cantner

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    Abstract

    The European Union (EU) Member States in central and eastern Europe (CEE) witnessed a surge in outward foreign direct investment (OFDI) between 2000 and the start of the global financial crisis. This article investigates whether the European integration process altered the relative importance of host country location factors. In particular, we investigate to what extent knowledge-seeking is a relevant investment motive, which has been documented as a key determinant for OFDI from other emerging economies. We apply a discrete choice approach to model foreign location choice of firms from CEE countries (CEECs) within the EU 27 (1996-2010). We find that the EU integration process is related with increasing importance of market access and less emphasis on labour cost advantages. We find heterogeneity in the valuation of foreign knowledge-related assets. The location probability within the EU15 is positively associated with knowledge-seeking. It also plays a role for technology-intensive industries and larger firms
    Original languageEnglish
    JournalJournal of Common Market Studies
    Volume53
    Issue number6
    Pages (from-to)1248-1267
    Number of pages20
    ISSN0021-9886
    DOIs
    Publication statusPublished - 2015

    Keywords

    • Central and eastern europe
    • European Integration
    • Location choice
    • Outward FDI

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