ABSTRACT
This chapter focuses on the growing role of the service sector within CEE economies. The growth of the tertiary sector within employment and growth has been accompanied by increasing global integration, particularly in advanced business services. CEE regions have become popular targets for business and financial services offshoring, and FDI inflows have also become dominant in the banking sector. However, this integration path has also become a source of external dependencies and systemic vulnerabilities, which have contributed to the transmission of exogenous shocks during the global financial crisis, and have also had long-term consequences for macro-regional convergence and capital accumulation processes.
