Arbeitspapier

Trade balances of the central and east European EU member states and the role of foreign direct investment

Given the large trade and current account deficits in some of the new EU member states the development of their external economic situation plays a role in assessing their aptitude to enter the European Monetary Union. The empirical analysis with aggregated data indicates that in the eight central and east European EU member states FDI and trade are complementary. This result is confirmed by an FDI enhanced gravity model which makes use of sectoral data provided by the Bundesbank's micro database direct investment (MIDI). The net effect of FDI on the trade balance is ambiguous, but FDI in high-tech industries clearly stimulates exports more than imports. Technological spill-over and the conglomeration of human capital seem to be important factors for the export performance. Against this background the prospects for the Czech Republic, Hungary, Slovenia and the Slovak Republic look more favourable compared to the Baltic states.

Language
Englisch

Bibliographic citation
Series: Discussion Paper Series 1 ; No. 2005,41

Classification
Wirtschaft
Economic Integration
Empirical Studies of Trade
International Investment; Long-term Capital Movements
Subject
foreign direct investment
trade balance
gravity model
Handelsbilanz
Zahlungsbilanzgleichgewicht
Direktinvestition
Schätzung
EU-Staaten

Event
Geistige Schöpfung
(who)
Herrmann, Sabine
Jochem, Axel
Event
Veröffentlichung
(who)
Deutsche Bundesbank
(where)
Frankfurt a. M.
(when)
2005

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Herrmann, Sabine
  • Jochem, Axel
  • Deutsche Bundesbank

Time of origin

  • 2005

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