Europe, FDI, Other Publications, Post-communist transition and development issues

Foreign Direct Investments in Small Business of Transition Economies


Public notion usually attributes superior qualities to foreign direct investments in transition economies. According to a common belief they are equipped with modern technology, possess up-to-date managerial capacities, use state-of-the-art management practices, are more effective than local companies and show better financial performances. These qualities clearly distinguish foreign ventures from domestic ones. There is an empirical evidence that proves existence of these differences.

This paper was prepared within the research project entitled: "The Impact of Barriers of Entry on the Speed of Transition: A Comparative Study of Countries in Different Stages of Transition", co-ordinated by Professor Leszek Balcerowicz. This research was undertaken with support from the European Commission's Phare ACE Programme 1995.