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FDI and employment in CEECs

FDI and employment in CEECs. by Gábor Hunya hunya@wiiw.ac.at. FDI inflow, EUR million. Inward FDI stock per capita, EUR. FDI stock by economic activity, 2002/2003. Sequencing of FDI during transformation. Employment effects of FDI by entry target.

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FDI and employment in CEECs

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  1. FDI and employment in CEECs by Gábor Hunyahunya@wiiw.ac.at

  2. FDI inflow, EUR million

  3. Inward FDI stock per capita, EUR

  4. FDI stock by economic activity, 2002/2003

  5. Sequencing of FDI during transformation

  6. Employment effects of FDI by entry target

  7. Share of foreign affiliates in manufacturing, 2001, %

  8. Share of FIEs in manufacturing employment, %

  9. Manufacturing employment change 1998-2001

  10. Manufacturing sector FIE/DE*100

  11. Share of FIEs in employment 2001, %

  12. New trends of FDI and their employment impacts • EU membership: lower transactions cost, concentration and specialization of locations • New FDI attracted by EU funds, agriculture, services • Export oriented efficiency seeking FDI grows faster than domestic market oriented • Labour cost advantage attracts more FDI from the West,but also diverts to the East • Need for integration into the domestic economy – policy support • Need for higher skilled workforce • Increasing competitiveness through increasing productivity • Unsolved problem: mass-scale under-employment of low-skilled labour-force and of unattractive regions

  13. Number of employees in the automotive industry, 1000

  14. Share of automotive industry in manufacturing employment, %

  15. Share of FIEs in automotive employment, %

  16. FDI trends in the automotive industry • Restructuring and development in CEECs entirely foreign-led • More expansion than relocation • Contributed to employment, exports, technological learning • Investor specific differences • Most integrated in the Czech Republic and Hungary, less in Poland and Slovakia • Assemblers reduce, component producers increase employment • Promotion and subsidizing requested by investors • Necessary to increase supplier investment and networking • Spillovers on training and development exist, need promotion

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