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The Effect of Trade and FDI on Employment in Central and Eastern European Countries: A Country-Specific Panel Data Analysis for the Manufacturing Industry

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Part of the Schriftenreihe der Österreichischen Gesellschaft für Europaforschung (ECSA Austria) / European Community Studies Association of Austria Publication Series book series (EUROPAFORSCH,volume 12)

Abstract

This paper analyzes the labor demand based on panel data of manufacturing industry from Central and Eastern European Countries and discusses the effect of domestic factors (wages and output) and international factors (trade and FDI) on employment in the post-transition period. The findings indicate that employment only responds to wages in 50 per cent of the cases. The output elasticity of labor demand is mostly positive, but low, with a number of cases where employment is completely de-linked from output. An impressive speed of integration to the European economic sphere through FDI and international trade has not prevented job losses in the manufacturing industry. While there are very few cases of positive effects, insignificant effects of trade and FDI dominate, some evidence of negative effects appears as well.

This is a shortened version of Onaran Ö., “Jobless growth in Central and Eastern European Countries: A country-sepcific panel data analysis for the manufacturing industry,” EASTERN EUROPEAN ECONOMICS 46 (4), July–August 2008. The author is grateful to Paul Ramskogler for excellent research assistance, to an anonymous referee, Engelbert Stockhammer, and Markus Leibrecht for fruitful discussions, and to the Vienna Institute of International Studies, and in particular to Monika Schwarzhappel, and Renate Prasch for their valuable support with data. Needless to say, all remaining errors are mine.

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Onaran, Ö. (2009). The Effect of Trade and FDI on Employment in Central and Eastern European Countries: A Country-Specific Panel Data Analysis for the Manufacturing Industry. In: Tondl, G. (eds) The EU and Emerging Markets. Schriftenreihe der Österreichischen Gesellschaft für Europaforschung (ECSA Austria) / European Community Studies Association of Austria Publication Series, vol 12. Springer, Vienna. https://doi.org/10.1007/978-3-211-92662-8_4

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  • DOI: https://doi.org/10.1007/978-3-211-92662-8_4

  • Publisher Name: Springer, Vienna

  • Print ISBN: 978-3-211-92661-1

  • Online ISBN: 978-3-211-92662-8