FDI, Growth and Structural Change in Eastern Europe

  • Abstract:

    In this paper we look at the growth enhancement and growth retardation of major Central and East European countries (CEEC) during the last decade or so. We observe large advances in growth rates, in the early part of the 2000s, and then a rapid contraction after 2008. This rise and fall in economic growth is mirrored by the corresponding rise and fall of Foreign Direct Investment (FDI). We investigate the causes and consequences of this growth transformation through the prism of foreign direct investment. We emphasize the structural changes necessary to re-ignite growth without which the CEEC will revert back to the stagnation of the historical past.