Foreign direct investment: a tool or a target for industrial policy in Eastern Countries?

Abstract

Is there any linkage between industrial policy and the inflow of Foreign Direct Investment in Eastern European countries? This is the core question which is analysed and discussed in this paper. The transition process of Central and Eastern Europe to a market economy has raised a lot of challenging questions both to Applied Economics and to Management Science. Enterprise adjustment remains one of the most interesting and complex as it is closely related to a wide range of economic, policy and management issues. Foreign Direct Investment, privatisation and industrial policy and their sort of linkage, remain some of the most interesting factors in the transition process. It seems that no sharp distinction can be presented between FDI as a target and FDI as a tool for industrial policy, but national differences remain significant as well as enterprises adjustment capacity