Petr Pavlínek

Regional Development Implications of Foreign Direct Investment in Central Europe

Foreign direct investment (FDI) has been accorded a central role in the post-communist economic transformation of Central and Eastern Europe. This paper examines the regional effects of FDI in Central Europe (Czech Republic, Hungary, Poland and Slovakia) in the 1990s. It challenges uncritical views of FDI and its role in regional economic transformations by considering its potentially adverse effects for regional economic development, such as the intensification of uneven development, the development of a dual economy, failure to develop linkages with local and regional economies, and its contribution to increased regional economic instability. A case-study of the Czech automotive components industry illustrates the regional economic effects of FDI in Central Europe in terms of stability of investment, its links with the regional economy and its effects on domestic research and development.

Industrial Upgrading Through Foreign Direct Investment in Central European Automotive Manufacturing

This article draws on the global value-chain approach to investigate industrial upgrading in the automotive industry of four Central European (CE) countries: Czech Republic, Hungary, Poland and Slovakia. We review post-1990 production trends and the associated changes in the geography of automobile production in Central and Eastern Europe (CEE) based on inflows of foreign direct investment (FDI).To evaluate industrial upgrading, we examine the changes in the international trade of CE countries with automotive products classified in three value-added classes between 1996 and 2006, and we consider the increasing location of automotive design in CE by foreign investors.We classify CE automobile assembly plants into four types based upon the role of local design, local content, and their links with domestic economies. Based on the results of the analysis, we consider the effects of FDI and industrial upgrading on the role of CE in the European automotive production system.

Transformation of the Central and East European passenger car industry: selective peripheral integration through foreign direct investment

The Central and East European (CEE) passenger car industry underwent major transformations through foreign direct investment (FDI) in the 1990s. The author demonstrates that the effects of FDI on the passenger car industry have been profound, but geographically uneven. To understand the different regional and local strategies of foreign car producers better, the author introduces a classification of FDI in the passenger car industry based on the degree of embeddedness in local economies and relationships to path dependency in the 1990s. The effects of FDI on selective peripheral integration of parts of CEE into the European car production system, as well as the role of Central Europe in the division of labour in the European passenger car industry, are also considered.

Regional Restructuring of the Škoda Auto Supplier Network in the Czech Republic

This article examines the regional restructuring of the supplier base of SkodaAuto, a vehicle manufacturer in the Czech Republic (Czechia). We investigate the tiered structure of the Škoda suppliers in Czechia by classifying 232 Czech-based Škoda suppliers in three distinct tiers and comparing the differences in the distribution between the foreign-owned and domestic suppliers in these tiers.We explore the changes in the spatial distribution of the Škoda suppliers in Czechia since the beginning of the post-socialist economic transformation in the early 1990s, which are linked to the tiering of the supplier base and to the differences among the individual tiers in the type of the supplied components and in the timing of component deliveries. Both the processes of concentration and dispersion are identified.We then analyse the relationships between the location of the Škoda suppliers within Czechia and their basic characteristics such as their size, ownership, age and position in the supplier tier. Based on the results we consider the geographic differences in the regional development potential of the Škoda supplier network in Czechia.

The Internationalization of Corporate R&D and the Automotive Industry R&D of East-Central Europe.

Abstract This article examines the development of corporate research and development (R&D) in the automotive industry of East-Central Europe (ECE) in the context of the internationalization of corporate R&D generally and the automotive industry R&D specifically. Driven by large inflows of foreign direct investment since the early 1990s, vehicle assembly and the production of automotive components grew significantly in ECE. In my study I investigated the extent to which these increases in production have also led to the development of automotive R&D as an example of a higher value-added function of the automotive value chain. I conducted a more detailed analysis of Czech automotive R&D because of its prominent position in ECE. Despite modest growth, my analysis uncovered inherent weaknesses of automotive R&D in ECE and strong barriers to its future development related to its peripheral position in the European and global automotive production networks.

Foreign Direct Investment in the Czech Republic

This paper evaluates foreign direct investment (FDI) in the Czech Republic and its regional development consequences after the collapse of state socialism. Two types of FDIs are identified: cross border export-oriented investments and market capture investments. The cross border export-oriented investments exploit low cost labor in the service of external markets and are typically concentrated in peripheral areas, mostly along the former West German border. This type of FDI is not likely to contribute to durable regional economies. The market capture investments involve both servicing the Czech market and integrating activities within a larger, multinational corporate network. This type of investment may create more durable sources of regional economic activity. A case study of the Volkswagen/Skoda joint venture is used to examine market capture investments and their consequences for regional development. This paper is based on interviews with plant managers and trade union leaders in companies with forei...

Transformation of the Czech Automotive Components Industry Through Foreign Direct Investment

This paper traces the profound restructuring of the Czech automotive components industry during the 1990s and early 2000s through foreign direct investment (FDI), and the integration of Czech-based suppliers into European and global automotive supplier networks. The magnitude of change is highlighted by an initial characterization of the Czechoslovak state socialist automotive components industry prior to restructuring. The paper then focuses on the effects of price and trade liberalization and survival strategies employed by component suppliers during the early 1990s. It subsequently illustrates the effects of Volkswagens investment in Škoda (a Czech passenger car maker) on Škodas supplier network and the strategies employed by VW-Škoda to rapidly improve the quality of supplied components while keeping their prices low. Journal of Economic Literature, Classification Numbers: D20, F21, L62. 5 figures, 4 tables, 65 references.

The impact of the 2008–2009 crisis on the automotive industry: global trends and firm-level effects in Central Europe:

This article examines the impact of the 2008–2009 economic crisis on the automotive industry. The uneven nature of the crisis contributed to the gradual shift in production from traditional core areas of the global automobile industry to selected less developed economies. In this context, the paper analyses the firm-level effects of the economic crisis in the Czech and Slovak automotive industries as two examples of automotive industry peripheries that were integrated in the European automobile production system and experienced rapid production increases after 1990. The analysis draws on unique data collected during a survey of 274 Czech-based and 133 Slovak-based automotive firms conducted in autumn 2009 and spring 2010, 98 company interviews conducted with automotive firms in Czechia in 2010 and 2011, and 30 interviews conducted in Slovakia in 2011. Changes in revenues, production and employment during the economic crisis are compared between Czechia and Slovakia, and are analysed according to ownership, the involvement of firms in the automotive value chain and firm size. The article also investigates plant closures and relocations in the Czech and Slovak automotive industries during the economic crisis.

Regional development and the disintegration of Czechoslovakia

Abstract The breakup of Czechoslovakia on 31 December 1992 resulted in the emergence of a newly independent Slovakia and Czech Republic. The split is often interpreted as the result of ethnic nationalism. In contrast, this paper attempts to assess the influence of regional inequalities and uneven economic development on the split. Pre-World War Two Czechoslovakia was unable to address large regional differences between the Czech lands and Slovakia. The economic policies pursued by the state socialist governments following 1948 were directed toward the elimination of these differences through rapid industrialization of Slovakia. The economic transformation in Czechoslovakia after the collapse of state socialism resulted in reemergence of uneven development between Slovakia and the Czech lands, which contributed to the disintegration of the country. The links between economic issues and politics are discussed, and the paper shows how the regional inequalities and economic issues were used to justify the necessity of Slovak and Czech independence.

Environmental Pasts/Environmental Futures in Post-Socialist Europe

This contribution focuses on the limits of European Union programmes and accession practices on environmental policies and performance in Central and Eastern Europe. In particular, we document some of the ways in which state socialist and post-socialist environmental conditions, practices and policies are shaping, and in turn being shaped by, the path of accession and integration. We focus on the diverse and changing patterns of air, water and soil quality in Central and Eastern Europe, the contested nature of new environmental policies, the environmental consequences of economic change, and the sustainability of emerging environmental regimes. The contribution concludes with several questions about the consequences of new state membership for future EU environmental policies.