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A Successful Transformation?The Role of FDI in the Czech Automotive Industry

A Successful Transformation?: The Role of FDI in the Czech Automotive Industry 6 The Role of FDI in the Czech Automotive Industry The role of FDI has been considered to be critical in the post-socialist eco- nomic development of CEE (e.g. Dunning 1993:25; Ozawa 2000:xii; Lankes and Stern 1997:1) because FDI is viewed as an “engine of devel- opment” (Csáki 1995:112), a vehicle of economic modernization and a driving force of productivity development (Hunya 2000:8, 12). Some commentators even consider FDI to be a “ship of riches that will ensure economic prosperity” (Kojima 2001:22). By the late 1990s, it has become a cliché in CEE to consider the role of foreign capital to be superior to that of domestic capital in enterprise restructuring. This positive view of FDI resulted at least partly from failure of domestic privatization schemes to generate strategic restructuring at the enterprise level in countries such as Czechia and Slovakia. It seems, however, that such views tend to exag- gerate the actual effects of FDI in CEE and its role in the post-1989 eco- nomic transformation, because the overall volumes of FDI in CEE remain low when compared to other world regions. The generally assumed supe- rior performance of enterprises with foreign capital compared to domestic enterprises has http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

A Successful Transformation?The Role of FDI in the Czech Automotive Industry

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Publisher
Physica-Verlag HD
Copyright
© Physica-Verlag Heidelberg 2008
ISBN
978-3-7908-2039-3
Pages
185 –225
DOI
10.1007/978-3-7908-2040-9_6
Publisher site
See Chapter on Publisher Site

Abstract

6 The Role of FDI in the Czech Automotive Industry The role of FDI has been considered to be critical in the post-socialist eco- nomic development of CEE (e.g. Dunning 1993:25; Ozawa 2000:xii; Lankes and Stern 1997:1) because FDI is viewed as an “engine of devel- opment” (Csáki 1995:112), a vehicle of economic modernization and a driving force of productivity development (Hunya 2000:8, 12). Some commentators even consider FDI to be a “ship of riches that will ensure economic prosperity” (Kojima 2001:22). By the late 1990s, it has become a cliché in CEE to consider the role of foreign capital to be superior to that of domestic capital in enterprise restructuring. This positive view of FDI resulted at least partly from failure of domestic privatization schemes to generate strategic restructuring at the enterprise level in countries such as Czechia and Slovakia. It seems, however, that such views tend to exag- gerate the actual effects of FDI in CEE and its role in the post-1989 eco- nomic transformation, because the overall volumes of FDI in CEE remain low when compared to other world regions. The generally assumed supe- rior performance of enterprises with foreign capital compared to domestic enterprises has

Published: Mar 4, 2008

Keywords: Foreign Investor; Domestic Firm; Central Europe; Foreign Capital; Foreign Ownership

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