Globalisation and development: new evidence from Central and Eastern Europe

To various degrees, Central and Eastern European countries increased their participation to the world economy over the last ten years. In particular, they accepted the challenge of trade openness and attracted significant foreign direct investment. This paper assesses the impact of these major changes on output growth in this region. Results of a panel data analysis suggest that increased EU integration and openness as well as reduced import duties were favourable to development. There is also evidence that increased FDI inflows may be associated with better output performances. Keywords: Transition, Openness, FDI, Development, Panel data JEL Classification Index: F15,052
1. Introduction During the first ten years of transition from plan to market, Central and Eastern European countries (CEEC) implemented comprehensive reform programs and achieved essential economic transformations. (1) The [...]