Foreign Investment and Privatization in Eastern Europe

304 Pages·1993·27.629 MB·English

by  Patrick Artisien-Maksimenko, Matija Rojec (eds.)

Foreign Investment and Privatization in Eastern Europe
Also by Patrick Artisien-Maksimenko
MULTINATIONALS IN EASTERN EUROPE
FOREIGN INVESTMENT IN RUSSIA AND OTHER SOVIET SUCCESSOR STATES
(with Yuri Adjubei)
FOREIGN INVESTMENT IN CENTRAL AND EASTERN EUROPE
(with Matija Rojec and Marjan Svetlici{)
NORTH-SOUTH DIRECT INVESTMENT IN THE EUROPEAN COMMUNITIES
(with Peter f. Buckley)
MULTINATIONALS AND EMPLOYMENT (with Peter f. Buckley)
DIE MULTINATIONALEN UNTERNEHMEN UND DER ARBEITSMARKT
(with Peter f. Buckley)
YUGOSLAV MULTINATIONALS ABROAD (with Carl H. McMillan
and Matija Rojec)
YUGOSLAVIA TO 1993: Back From the Brink?
]OINT VENTURES IN YUGOSLAV INDUSTRY
Also by Matija Rojec
FOREIGN INVESTMENT IN CENTRAL AND EASTERN EUROPE
(with Patrick Artisien-Maksimenko and Marjan Svetlici{)
FOREIGN PRIVATISATION IN CENTRAL AND EASTERN EUROPE
(with John H. Dunning)
INVESTMENT AMONG DEVELOPING COUNTRIES AND TRANSNATIONAL
CORPORATIONS (with Marjan Svetliti{)
SLOVENIA'S STRATEGY FOR ACCESSION TO THE EUROPEAN UNION
(with M. Mrak and f. Potoenik)
YUGOSLAV MULTINATIONALS ABROAD (with Patrick Artisien-Maksimenko
and Carl H. McMillan)
Foreign Investment and
Privatization in
Eastern Europe
Edited by
Patrick Artisien-Maksimenko
Consultant in International Business
and
Matija Rojec
Senior Research Fellow
Slovene Institute of Macroeconomic Analysis
Ljubljana
This book is dedicated to
Carl (Professor Carl H. McMillan)
our friend and mentor
© Patrick Artisien, Matija Rojec and Marjan Svetlicic 1993
Foreword © Peter J. Buckley 1993
Softcover reprint of the hardcover 1st edition 1993
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this work in accordance with the Copyright, Designs and Patents Act 1988.
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ISBN 978-1-349-22650-4 ISBN 978-1-349-22648-1 (eBook)
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Contents
List of Tables vii
List of Figures x
Preface xi
Notes on the Editors and the Contributors xiii
Part I Contextual Aspects
1 Foreign Investment and Privatization in Eastern Europe:
An Overview 3
Patrick Artisien-Maksimenko and Matija Rojec
2 Assessing the Costs and Benefits of Foreign Direct Investment:
Some Theoretical Considerations 34
fohn H. Dunning
3 Foreign Direct Investment and the Private Sector 82
Vitalija Gaucaite
4 Direct Investment in South-East Asia and Eastern Europe:
A Comparative Analysis 102
Klaus Meyer
Part II Empirical Country Studies
5 Foreign Investment and Privatization in the Czech Republic 131
Alena Zemplinerova
6 Foreign Investment and Privatization in Poland 156
Wladyslaw Jennakowicz
7 Foreign Investment Companies in the Hungarian Economy 173
Gabor Hunya
8 Foreign Capital and Privatization in Hungary 193
Maria Illes
9 The Problems of Foreign Capital Participation in Russia's
Privatization 212
Yuri Adjubei
v
vi Contents
10 Foreign Investment and Privatization in Slovenia 229
Matija Rojec
11 Foreign Investment in Estonia 256
Philip Hanson
Bibliography 273
Index 285
List of Tables
1.1 Basic characteristics of sample companies in the Czech
Republic, Hungary, Slovenia and Poland 5
1.2 Sectoral distribution of sample target companies 7
1.3 Countries of origin of foreign parents in sample 8
1.4 Basic characteristics of sample foreign companies 9
1.5 Distribution of FDI entities in CEE according to the form
of FDI (1988-92) 12
1.6 Factors determining the choice of market entry: survey results 14
1.7 Types of acquisitions: survey results 17
1.8 Factors leading to joint venture acquisition: survey results 18
1.9 Factors determining foreign investors' decisions to acquire
a CEE company: survey results 22
1.10 Target companies' motives for seeking strategic foreign
investors: survey results 23
1.11 Previous cooperation between foreign parent and target
company: survey results 24
1.12 Major characteristics of the bidding procedure: survey results 25
1.13 Government incentives and guarantees to foreign parent
companies: survey results 27
1.14 Ratings of government incentives and guarantees in foreign
firms' decision to invest: survey results 28
1.15 Guarantees and promises of foreign parent companies: survey
results 28
1.16 Post-acquisition changes and restructuring in acquired
companies: survey results 29
1.17 Realization of objectives and expectations of foreign and host
country partners: survey results 30
2.1 A reconfiguration of the eclectic paradigm of international
production 38
2.2 The changing world of foreign direct investment 48
2.3 The five ways for a nation to upgrade its competitiveness and
comparative advantage 53
2.4 Four main types of foreign direct investment 57
2.5 Some likely contributions of different types of FDI to the
upgrading of competitiveness of host countries 60
2.6 Some country-specific attributes affecting FDI 63
2.7 Some possible contributions of inbound FDI to the
upgrading of the competitive advantage of host countries 72
vii
viii List of Tables
3.1 Main privatization techniques for medium and large-scale
enterprises and acquired FDI in selected European transition
economies, 1995 84
3.2 Share of major sectors in total output in selected European
economies in transition, 1991 and 1995 87
3.3 Employment by major sectors in selected European transition
economies, 1992 and 1994 89
3.4 FDI inflows into the European transition economies,
1991-96 94
3.5 FDI and privatization proceeds in selected European
transition economies 96
4.1 Major recipients of FDI among emerging markets 105
4.2 Cross-country pattern of FDI flows in East Asia 117
4.3 Labour costs in Europe 124
4.4 Cross-country pattern of FDI flows in Eastern Europe 127
5.1 FDI foreign credits and deposits in the Czech Republic,
1990-95 133
5.2 FDI inflows to the Czech Republic by sector,
1990-June 1996 135
5.3 Size of FDI in the Czech Republic 136
5.4 FDI in the Czech Republic by country of origin, 1990-96 137
5.5 FIEs in the Czech Republic by industry, 1993 and 1995 139
5.6 Czech Republic: size distribution of enterprises between
1993 and 1996 140
5.7 Share of FIEs in total workforce, output and other indices
by industrial sector in the Czech Republic, 1995 140
5.8 Comparison of enterprises by ownership and sector in the
Czech Republic, 1995 142
5.9 FIE share of total employment, output, value added,
investment and export of manufacturing in the Czech
Republic, 1992-95 144
5.10 Size of foreign investments in Czech privatization 148
5.11 Stakes acquired by foreign investors in Czech privatization 149
6.1 Investment development path model 157
6.2 FDI stock and flows to Poland, 1987-96 160
6.3 Greenfield investment, indirect and direct acquisitions in
Poland, 1987-96 161
6.4 FDI distribution by types of investment in Eastern Europe,
1993 163
6.5 FDI distribution in Poland by foreign capital shares, 1988,
1993 and 1996 165
6.6 Sectoral distribution of FDI in Poland, 1990-95 166
6.7 Origin of FDI in Poland, 1988-97 168
List of Tables ix
6.8 The ten largest foreign investors in Poland, 1988, 1993 and
1996 170
7.1 Hungary: gross valued added of companies with double-entry
book-keeping, 1992-94 178
7.2 Foreign investment enterprises in Hungary, 1989-94 180
7.3 Share of foreign investment enterprises in the total economy,
1993-94 180
7.4 Hungary: share of FIEs in the total economy by selected
industries, 1994 184
7.5 Hungary: share of FIEs in manufacturing, 1994 185
7.6 Hungary: foreign trade of FIEs, 1992-94 187
8.1 Business organizations with FDI in Hungary, 1989-93 201
8.2 Capital and ownership structure of business organizations
with FDI in Hungary, 1989-93 202
8.3 Sectoral distribution of FDI in Hungary, 1991-93 203
8.4 Foreign ownership of shares in all subscribed capital,
Hungary, 1991-93 204
8.5 Regional distribution of FDI in Hungary, 1990-93 205
8.6 Hungary: new business organizations set up with foreign
capital, 1992-93 206
8.7 Hungary: FDI stock, April 1995 207
8.8 Hungary: top SO foreign investments, 1993 208
8.9 Profitability of enterprises in Hungary 211
9.1 Large privatization-related foreign investment projects in the
Russian Federation, 1991-96 219
10.1 Types of FDI in Slovenia 235
10.2 Flows, stocks and changes in stocks of inward FDI in Slovenia,
1993-98 237
10.3 Distribution of end-year stocks of inward FDI in Slovenia
by investing countries, 1997 238
10.4 Distribution of end-year stocks of inward FDI in Slovenia
by industries, 199 7 239
11.1 Foreign investment in Estonia, 1994-mid-1997 265