Labour costs and FDI flows into Central and Eastern European Countries: A survey of the literature and empirical evidence

Bellak, Christian; Leibrecht, Markus; Riedl, Aleksandra

doi:10.1016/j.strueco.2007.03.001

Cited by 124 publications

(103 citation statements)

References 29 publications

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“…Wages and land rents are the prices of the two input factors. Following the critique by Bellak, Leibrecht, and Riedl (2008), gross wages are not an adequate measure for labour costs, so that unit labour cost are defined instead as…”

Section: The Explanatory Variablesmentioning

confidence: 99%

Network and border effects: Where do foreign multinationals locate in Germany?

Spies

2010

Regional Science and Urban Economics

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This study assesses the determinants of location choices of foreign multinational firms at the level of German federal states. Adjacency and existing firm networks are assumed to influence the investors' profits in a given location by overcoming informational disadvantages when entering the new market. A conditional and a nested logit model resemble the structure of the location choice process of individual investors well. By using affiliate-level data between 1997 and 2005, the results confirm that firms react positively to local demand, a common border and existing firm networks, while unit labour costs exhibit the expected negative impact. In the sectoral estimations, it is shown that these effects vary in their relevance among manufacturing and service affiliates, and between upstream and downstream activities.

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Section: The Explanatory Variablesmentioning

confidence: 99%

Network and border effects: Where do foreign multinationals locate in Germany?

Spies

2010

Regional Science and Urban Economics

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“…These results were consistent with traditional FDI theory where bilateral trade, market size, GDP growth, openness, and resource endowment had a considerable influence. However, using a dataset for the same pe-2 There are several comprehensive reviews on the determinants of FDI such as Blonigen (2005) and Bellak et al (2008). riod, Huang -Wang (2011) found that traditional variables such as market size, production cost, and legal environment did not impact Chinese investors' choice of location for ODI. They argue that the main purpose of China's ODI model was not to expand production overseas, but to strengthen industries at home.…”

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confidence: 99%

What drives China’s outward direct investment?

2015

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This study examines the determinants of China's outward direct investment (ODI) between 2003 and 2009. We fi rst analyse the structure and dynamics of ODI. We propose three testable hypotheses including technology sourcing, resource seeking, and political linkage. Various estimates show that technology sourcing is supported moderately, whereas resource seeking serves one of primary driving forces. Crucially, the motive of political linkage is signifi cantly related to ODI and it is particularly relevant to developing destinations. This fi nding indicates that China tends to invest in developing countries with high political risk, which is in contrast with the prediction of the FDI theory. Furthermore, a developing country with high political risk seems to be the favoured destination for China's ODI to acquire technologies and resources.

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“…Most of the studies have focused on the impact of (Bellak, Leibrecht & Riedl, 2008) and in Romania (Birsan & Buiga, 2008). Therefore, analysing of the consequences of the FDI inflows on the wages' level in Romania pays a particular importance for the literature.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%