ABSTRACT
Policy makers in most European countries consider inward foreign direct investment (Fdi) as an indispensable part of their industrial development strategy. Many of the less economically developed, more “peripheral” economies of the Eu-15, such as Greece, Spain, Portugal, and Ireland (referred to here as the “cohesion” countries), followed this approach. Partly as a result of their success, these policies have been pursued much more explicitly by the new member states (Nms) and those wishing to join, a large number of both groups being located in Central and Eastern Europe (Cee) (referred to in this chapter as either the accession countries or Cee countries, irrespective of their membership status). Although this chapter focuses on the accession countries as a group, we acknowledge that this classification subsumes important differences between several subgroups which are themselves made up of heterogeneous countries. Important subgroups include the twelve new member states that joined in 2004, the two new members that joined in 2008, namely Bulgaria and Romania, and other candidate countries such as Croatia or Turkey. However, our aim is to discuss the broader aspects of the role of Fdi in industrial development, the principles of which, in our estimation, are broadly similar and relevant to all countries globally, although there may be differences in specific policy implementation given their specific stage of development. This chapter will discuss the costs, benefits, opportunities, and limitations of an FDI-based industrial development strategy in the accession and candidate countries.
