International Handbook on the Economics of Integration, Volume II
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International Handbook on the Economics of Integration, Volume II

Competition, Spatial Location of Economic Activity and Financial Issues

Edited by Miroslav N. Jovanović

With this Handbook, Miroslav Jovanović has provided readers with both an excellent stand-alone original reference book as well as an integral part of a comprehensive three-volume set. This introduction into a rich and expanding academic and practical world of international economic integration also provides a theoretical and analytical framework to the reader, presenting select analytical studies and encouraging further research.
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Chapter 13: The Opening Up of Eastern Europe at 20: Jobs, Skills and Reverse Maquiladoras in Austria and Germany

Dalia Marin


1 Dalia Marin 1 INTRODUCTION Many people in the European Union (EU) fear that Eastern enlargement will lead to major job losses in the member countries, in particular in Austria and Germany as the two most important neighbours of Eastern enlargement. More recently, in Germany these fears about job losses to the accession countries have extended to high-skill labour and information technology (IT) jobs. German firms are seen to outsource the skillintensive stages of production to Eastern Europe leading to an exodus of firms and highskill jobs to Eastern Europe. Are these fears justified? To address these questions the chapter utilises new survey data of 660 German and Austrian firms with 2,200 investment projects in Eastern Europe during the period from 1990 to 2001. The new survey data represent 100 per cent of Austrian and 80 per cent of German direct investment in Eastern Europe. This chapter is structured as follows. Section 2 discusses trade and investment integration in Eastern Europe. Section 3 outlines the data used in the chapter. Then three issues are examined in the following sections. First, I explore whether Eastern Europe has become a new member in the new international division of labour which has characterised the world economy in the last two decades. Is Eastern Europe becoming an important location for firms’ international organisation of production? (Section 4). Second, I examine whether an exodus of jobs to Eastern Europe has, in fact, taken place. Has Eastern enlargement encouraged the relocation of firms to Eastern...

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