Labor market effects of foreign direct investment and trade in Central and Eastern Europe


Type Research Project

Funding Bodies
  • WU Vienna (earmarked funds)

Duration March 1, 2005 - Feb. 28, 2006

  • Economics 1/Public Sector and Monetary Policy AE (Former organization)
  • Economics 9/Employment Theory and Policy AE (Former organization)

Tags

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  • Onaran, Özlem (Former researcher)
  • Ramskogler, Paul (Former researcher)
  • Stockhammer, Engelbert-Richard (Former researcher) Project Head
 

Abstract (German)

Bisher hat die Konvergenz der Mittel- und Osteuropäischen Ländern zu den westlichen Lebensstandards -zumindest verglichen mit den ursprünglichen Prognosen- nur bescheidene Fortschritte gemacht. Grosse Hoffnungen werden nun in den EU Beitritt gesetzt. Diese Hoffnungen beruhen vor allem auf zwei Mechanismen: den Wohlfahrtsgewinnen durch internationalen Handel und ausländischen Direktinvestitionen. Diese beiden Mechanismen werden daher im Zentrum des Forschungsprojekts stehen, das Effekte auf Lohnhöhe und Beschäftigung in den neuen Mitgliedsstaaten sowie Bulgarien und Rumänien untersucht. Ziel des Projekts ist es in einer sektoral differenzierten Weise das Verständnis für die sozialen Effekte von ausländischen Direktinvestitionen und Exportorientierung zu verbessern.


Abstract (English)

Recent evidence suggests that the integration of Central and Eastern European countries (CEEC) into the Western European economic area has so far failed to lead to converging living standards (Vaughan-Whitehead 2003, Paoli and Parent-Thirion 2003). In contrast, most studies expect Eastern enlargement to bring about increasing welfare in the new member states in the foreseeable future, though the time horizons of such predictions differ. Essentially, the optimism of these analyses is grounded in the perceived welfare effects of two key factors: the gains from trade openness, and from foreign direct investment (FDI). However, while there is a rich literature on the factors and prospects of convergence in per capita GDP terms, a more precise understanding of the distributional impact of free trade and FDI requires a great deal of further conceptual clarification and empirical testing. The proposed project aims at exploring the social - more specifically wage and employment - effects of open trade and FDI in the new EU member states, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia, and two membership candidates, Bulgaria and Romania.

The project proposes to analyse these effects at two levels. Firstly, it undertakes a quantitative analysis of the sector-specific impact of FDI and export-orientation on wages and employment. This will be done by means of an econometric investigation performed by the WU part of the research group. Secondly, since the explanatory power of standard quantitative methods is limited by the scarcity of reliable and comparable statistical data, the econometric study will be complemented by qualitative case studies of the social effects of FDI and export orientation in specific industries. These case studies of major export sectors, specifically textiles and apparel, electronics, and car manufacturing, will be prepared by the CEU part of the research group.

Partners

  • Central European University - Hungary

Publications

Journal article

2008 Onaran, Özlem. 2008. Jobless growth in the Central and Eastern European Countries: A country specific panel data analysis for the manufacturing industry. Eastern European Economics 46 (4): 97-122. (Details)
  Onaran, Özlem, Stockhammer, Engelbert-Richard. 2008. The effect of FDI and foreign trade on wage bargaining in the Central and Eastern European Countries in the post-transition era: A sectoral analysis. Structural Change and Economic Dynamics 19 66-80. (Details)

Chapter in edited volume

2009 Onaran, Özlem. Forthcoming. The Effect of Trade and FDI on employment in the Central and Eastern European Countries: a country specific panel data analysis for the manufacturing industry. In: The EU and Emerging Markets, Hrsg. Tondl, G., Springer. (Details)

Paper presented at an academic conference or symposium

2007 Onaran, Özlem. 2007. Jobless growth in the Central and Eastern European Countries: A country specific panel data analysis for the manufacturing industry. • The Third Bi-Annual Dijon Conference on Post-Keynesian Economic Policies, Dijon, Frankreich, 30.11 –1.12. (Details)
  Onaran, Özlem. 2007. Jobless growth in the Central and Eastern European Countries: A country specific panel data analysis for the manufacturing industry. • International Economic Workshop : “The EU and Emerging Markets: Trade and Investment Relations with Latin America, East Asia and Transition Countries, Wien, Österreich, 08.06-09.06. (Details)
2005 Onaran, Özlem. 2005. Country specific wage bargaining in the Central and Eastern Europe. Workshop on “Re-location of production and jobs to CEE countries - who gains and who loses? Hamburg Institute of International Economics, Hamburg, Deutschland, 16.09-17.09. (Details)

Working/discussion paper, preprint

2008 Onaran, Özlem. 2008. Jobless growth in the Central and Eastern European Countries: A country specific panel data analysis for the manufacturing industry. Political Economy Research Institute, University of Massachusetts, Working Paper 165. (Details)
2006 Onaran, Özlem, Stockhammer, Engelbert-Richard. 2006. The effect of FDI and foreign trade on wages in the Central and Eastern European Countries in the post-transition era: A sectoral analysis. Vienna University of Economics & Business Administration, Department of Economics Working Paper Series: No: 94. (Details)
  Stockhammer, Engelbert-Richard, Onaran, Özlem. 2006. National and sectoral factors in wage formation in Central and Eastern Europe. Vienna University of Economics & B.A. Working Paper No. 100 Dec 2006 . (Details)

Unpublished lecture

2008 Onaran, Özlem. 2008. Globalization and Labor. Summer School: Keynesian Macroeconomics and European Economic Policies’, Research Network Macroeconomics and Macroeconomic Policies,, Berlin, 31.07. (Details)
2007 Onaran, Özlem. 2007. Does Foreign Direct Investment Spur Social and Economic Development?”,. Workshop on “FDI Is a Religion!Tracing Realities behind a Development Discourse, Wien, 16.06. (Details)

Classification

  • 5335 Political economic theory (Details)
  • 5322 National/Political economy (Details)
  • 5334 Political economic policy (Details)

Expertise

  • employment
  • MOEL
  • wages
  • foreign direct investment
  • international trade