Wilfried Altzinger

Direct Versus Indirect FDI: Impact on Domestic Exports and Employment

One of the specific characteristics of Austrian Foreign Direct Investment (FDI) abroad is that a large part is carried out by firms, which themselves are affiliates of foreign Multinational Enterprises (MNEs). Such investment is termed indirect FDI in order to distinguish it from direct FDI, made by Austrian-owned firms. The objective of this paper is to analyse, whether the relatively better domestic employment performance of domestic firms (direct FDI) compared to foreign-owned firms (indirect FDI) can be linked to FDI abroad. Based on an analysis of the sales and trade structure of a sample of Austrian investors in Central and East European Countries (CEECs), this paper tests the hypothesis that these two groups of investors have different motives to invest in CEECs and therefore their activities in CEECs differ by type (sales affiliate, production abroad) and consequently the employment effects at home. Regression results confirm that direct FDI are more strongly determined by labour costs and exhibit an employment pattern related to a deeper international division of labour (including production), while indirect FDI is based relatively more on market seeking investment. Empirical results also confirm that employment effects at home differ. The positive (negative) effect of one additional unit of parent (affiliate) sales on domestic employment for indirect FDI compared to direct FDI is larger (smaller). The - despite this empirical fact - relatively better domestic employment performance of direct FDI is explained by their superior sales performance, resulting from restructuring their international division of labour.

Cross-Border Development in the Vienna/Bratislava Region: A Review

The economic and political changes in central and eastern Europe underway since the late 1980s have fundamentally changed the European landscape and the framework for economic activity in major parts of the continent. At a time when the European Union was moving towards a higher level of integration and aiming for a free flow of labour, investment, and goods, the opening of the former Eastern Bloc provided new and additional opportunities whilst posing new challenges.

Gender and Migration Background in Intergenerational Educational Mobility

We employ 2011 European Union Statistics on Income and Living Conditions survey data for Austria to perform uni- and multivariate econometric analyses to study the role of gender and migration background (MB) in intergenerational educational mobility. We find that there is more persistence in the educational attainment of girls relative to their parents than there is for boys. Migrant men are the most mobile group, and migrant women are the least mobile, showing the importance of conducting an analysis which looks at the intersections of MB and gender in social and economic outcomes.

Austria: Intergenerational mobility among children of immigrants

This chapter examines the intergenerational socio-economic mobility of immigrants’ offspring in Austria, and shows how the transmission from parents to their children differs between native parents and immigrant parents. The analysis focuses on children of Yugoslav and Turkish descent, since these two groups comprise the largest set of immigrants’ children in Austria. Besides offering information on the main characteristics of the Austrian immigration system and some historical and institutional information, it presents empirical findings on the educational attainment of immigrants’ offspring using EU-SILC data. The Austrian preschool system is identified in view of its strong relevance in determining one’s educational path, and results are presented on the role parents’ education plays in deciding which education route the children are likely to take. A concluding section summarises the three strongly interlinked “dividing lines” that greatly hinder the upward mobility of the native children of immigrants, and notes a striking contrast between those of Yugoslav and Turkish descent.

Intergenerationelle Einkommensmobilität in Österreich im Kontext europäischer Wohlfahrtsregime

Dieser Artikel befasst sich mithilfe von Daten aus dem EU-SILC 2005 mit intergenerationeller (Einkommens-)Mobilitat in Osterreich und ausgewahlten Mitgliedsstaaten der Europaischen Union. Anhand einer okonometrischen Untersuchung wird der Zusammenhang zwischen der finanziellen Situation der Elterngeneration und dem Einkommen der Kindergeneration erortert. Die Daten legen substantielle Unterschiede in Bezug auf intergenerationelle Persistenzen in verschiedenen Europaischen Wohlfahrtsregime offen und zeigen, dass vor allem in den nordeuropaischen Landern eine ausgepragtere Mobilitat als in den kontinentaleuropaischen Vergleichsstaaten (inkl. Osterreich) zu beobachten ist.

Revisiting Ricardo: Can Productivity Differences Explain the Pattern of Trade between EU Countries?

In this paper we revise the empirical tests of the Ricardian model by testing properly the Ricardian hypotheses on bilateral trade flows. Our tests are based on NACE 2-digit industry aggregation of productivity and of bilateral trade flows between 21 EU member states for the period 1994-2004. We compare the matchings between relative bilateral sectoral productivity rankings and bilateral sectoral exports-to-imports ratio rankings for each of 21 x 20 country pairs. We find that the Ricardian hypothesis is surprisingly good at predicting the static pattern of bilateral trade between individual EU member states even after controlling for the Heckscher-Ohlin type of capital-to-labor ratios. Long-term changes in the bilateral trade patterns, however, do not seem to be explained consistently neither by the variation in changes of relative productivity nor by the variation in changes of capital-to-labor ratios. Furthermore, we find quite a strong autoregressive impact of initial trade patterns on the long-term comparative advantages in the bilateral trade among countries. This implies that comparative advantages are structural by nature and that Ricardian differences in relative productivity can account for a good part of their static representation. Explaining their dynamic evolution over time, however, requires further research.