Catching-up Strategies in CESEE Economies
Edited by Ewald Nowotny, Peter Mooslechner and Doris Ritzberger-Grünwald
21. Capital inflows, exports and growth in the CESEE region Jarko Fidrmuc and Reiner Martin1 1 INTRODUCTION AND MOTIVATION Most of the countries in Central, Eastern and South-Eastern Europe (CESEE)2 are seen as good examples of the growth-enhancing effect of downhill capital flows, that is, capital flows from relatively capital-rich to relatively capital-poor countries. In addition, they are good examples for an export-led growth strategy, although especially more recent papers on growth in the region often emphasize that growth in the years immediately preceding the recent economic and financial crisis had been too much consumption driven (EBRD, 2010). These two facets of the CESEE region’s recent growth experience – substantial capital inflows and a very strong export performance – are closely interrelated and need to be seen in the context of the region’s gradual EU integration, which culminated in the EU accession of ten CESEE countries in 2004 and 2007. First, a large share of the capital flows into the region originated from the EU. These inflows, in particular inward FDI, arguably helped to build up the capital stock in the CESEE countries, which was expected to facilitate export growth. Second, EU integration provided a major boost for the CESEE exporting industries by opening up a large market at the region’s doorstep. The economic and financial crisis which started in 2007 (or 2008 for most of the CESEE region) had a major impact on these two facets of the CESEE growth model.3 First, capital inflows into the region took a severe...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.