Lotze, Hermann: Integration and Transition on European Agricultural and Food Markets: Policy Reform, European Union Enlargement, and Foreign Direct Investment - Four Essays in Applied Partial and General Equilibrium Modeling -

159

Chapter 5. Foreign Direct Investment Impact in Transition Countries: A General Equlibrium Analysis Focussing on Agriculture and the Food Industry

5.1. Introduction

Over the last decade, Central and Eastern European countries (CEEC) have been undergoing a political and economic transformation at an unprecedented speed and intensity. Most economic sectors in these countries are suffering from a lack of capital and up-to-date technology. This is especially true for the food industry which was generally one of the least efficient sectors in centrally-planned economies (OECD 1991). Foreign direct investment (FDI) is expected to contribute significantly to the process of economic restructuring in CEEC. Many politicians and economists in these countries believe that an inflow of foreign capital will accelerate economic growth, improve their trade balance, give access to modern technology and know-how and increase employment. The International Monetary Fund points out that "direct investment ... involves the transfer of a package of resources, including technological, managerial, and marketing expertise in addition to capital; these may have an even greater impact than the capital flows on a recipient country's production capabilities" (IMF 1985, p.1). Of course, these effects will not be realized to the same extent in all sectors of an economy. Some sectors are more attractive to foreign investors than others and there will be spillover effects between sectors, e.g. through intermediate input use.

Has FDI kept up with high expectations of CEEC policy-makers during the first years of transition? What are the general equilibrium effects of a capital inflow combined with technology transfer and spillovers? How is primary agriculture affected by foreign investment in food industries? These questions can only be answered in some kind of controlled experiment, since many overlapping factors are shaping overall economic performance, and the pure effects of FDI can usually not be isolated. In this paper, such an experiment is conducted with an applied general equilibrium (AGE) model developed by the Global Trade Analysis Project (Hertel 1997). Data on FDI stocks in CEEC, collected by the United Nations Economic Commission for Europe (UNECE), are used to implement the relevant capital inflows into the transition economies. There are two model regions considered: the group of seven Central European countries


160

(CEC-7)<62> and the Former Soviet Union including the Baltics (FSU). Each of the model regions consists of ten sectors, with a focus on agriculture and food. The main objective of this paper is not only to model pure capital inflows, but to take into account the wider effects of technological and managerial know-how that are transferred in the process of FDI. Different options with respect to inter-sectoral labor mobility are also considered in order to take some market imperfections in transition countries into account.

The next section gives an overview of the theoretical effects of inward FDI on recipient economies. Section 5.3 provides some empirical facts on FDI in the CEEC. Then, four experiments are designed modeling pure and combined effects of FDI and technology transfer, and the model implementation in GTAP is given. In Section 5.5 simulation results are presented, followed by a concluding discussion.

5.2. Theoretical Effects of Foreign Direct Investment in Host Countries

There is a broad literature on determinants and implications of FDI in host countries.<63>,<64> Many studies have either dealt with capital flows between industrialized countries (e.g. Froot 1993, Safarian 1993) or with welfare consequences of foreign involvement in less developed countries (e.g. Moran 1986; Andersson 1991; Radke 1992). The general attitude of country governments towards FDI has changed profoundly over the last decades from a very critical position in the 1970s to a more favorable point of view in the 1990s. The reasons are more faith in the workings of market systems, increasing globalization of economic activities, and a higher mobility of assets like technology, learning experience and managerial know-how. Governments have gained a much better appreciation of the costs and benefits related to FDI. Not only direct contributions of foreign affiliates are taken into consideration, but also the wider impacts on the host country's competitiveness and its dynamic comparative advantages (Dunning 1994, p.4). In recent years the process of economic transition in Central and Eastern Europe has opened up new opportunities for FDI activities. Since the transition countries are a very heterogeneous group, experiences from industrialized as well as developing countries should be used for analyzing the effects of FDI in these emerging market


161

economies.<65> In general, positive as well as negative effects on host country welfare can be expected from FDI. The main findings in the literature will be summarized here.

Factor endowment

The major direct effect of FDI in the host country is an increase in factor endowments through an inflow of capital, technology and advanced management know-how. These factors are especially scarce in newly developing market economies. FDI is likely to create additional output growth through rising productivity of local factors, e.g. labor and land, and falling production costs. Consequently, local consumers will benefit from lower product prices and better quality (Meier 1995, p.248). However, after the start-up period of an investment, characterized by a net inflow of resources into the host country, any foreign investor will eventually expect to repatriate earned profits. Depending on the level of taxation this can cause a significant capital outflow and pressure on the host country's balance of payments (Meier 1995, p.250-251).

While FDI is certainly not the most important source of foreign production capital in market economies, it might play a more important role in transition countries where capital markets are only slowly developing. Moreover, the transfer of intangible assets like technology and know-how between countries is often confined to FDI or licensing arrangements, because arms-length contracts tend to fail on these markets and firms try to explore internalization advantages (Caves 1982, p.195-225; Ethier 1994, p.120-123).

Externalities

In addition to direct resource flows, the transfer of technology into host countries is also likely to have some external effects, as spillovers from foreign to local companies can be expected. "New technology is embodied in imported inputs and capital goods, sold directly through licensing agreements, or transmitted to exporters who learn about new techniques from their foreign buyers. In other cases, learning by doing among domestic firms, combined with investments in formal education and on-the-job training, is


162

critical" (Haddad and Harrison 1993, p.52).<66> Some authors argue that these positive externalities are the most important contribution of FDI to local economic development (Meier 1995, p.249).

On the other hand, negative externalities related to FDI have been mentioned, especially in the context of developing countries. There might be cases where multinational firms shift pollution intensive production to less developed countries, or where foreign investors gain political power in the local administration (Andersson 1991, p.29). Of course, these issues are hardly quantifiable.

Employment

By setting up new plants and providing new production technologies, foreign investors may create local employment and thus generate additional labor income in host countries. This is especially important in CEEC after the collapse of formerly state-owned production facilities. New local private firms have not yet developed sufficient employment opportunities, and in many cases foreign investment is a precondition for starting production again. However, the overall employment effect of FDI depends on the choice of technology and whether foreign investment comes as a complement or substitute for local investments. If a foreign, capital-intensive production technology is substituted for local, labor-intensive production processes, overall employment might even decrease. (Caves 1982, p.195-225; Helleiner 1989, p.1469-1472). Batra (1986) suggests that multinational corporations can cause a decline in total employment and real income of underdeveloped host countries, if their technology transfer is not accompanied by substantial capital investment. In this case foreign companies borrow from the local capital market and a crowding-out of local firms may occur. Hence, recipient countries should insist on maximum capital investment on the part of foreign investors.

International trade and competitiveness

Increased production due to FDI will also affect a host country's trade balance. In many cases FDI is primarily undertaken in order to serve export markets by exploring


163

locational advantages in the host country, like lower labor costs. Increased product quality and intra-firm linkages to the home country will increase a host country's competitiveness on international markets and might even provide access to new markets. Since foreign subsidiaries tend to import modern equipment from their home countries in the first expansion stage, FDI inflows typically cause an initial trade balance deficit in the host country. In the long run, however, rising output of subsidiaries will increasingly be exported, thus potentially turning around the balance-of-payments effect (Radke 1992, p.34-35; Welfens and Jasinski 1994, p.233).

Competition

FDI will have an impact on a host country's market structure and competition. If local industries have an oligopolistic structure, foreign entrants will induce competitive pressure and improve the situation of local consumers as well as input suppliers. In the case where former state monopolies dominate the local market, as it frequently occurs in the food sector of many transition countries, FDI might be the only way to introduce market competition at all. On the other hand, foreign investors might be attracted just because there are oligopoly rents to be earned in a certain industry. In this case it would not be in their interest to increase local competition. In some transition countries foreign investors have entered the market so quickly that they by now dominate several industries.<67> Hence, it cannot be precluded that in some cases FDI decreases domestic competition which might suppress local entrepreneurship and make the host country more dependent on foreign companies (Caves 1982, p.94-128; Helleiner 1989, p.1458-1461; Radke 1992, p.40-43).

Government intervention and host country welfare

Finally, the impact of FDI on host country welfare depends on the type of government intervention and the level of taxation. In order to capture some of the benefits already mentioned, many governments try to attract foreign investors through tax concessions during the start-up period. They also regularly provide investment incentives in certain sectors in order to support their general development objectives.<68> If there are positive


164

externalities from FDI through technology spillovers, an investment subsidy by the host government might be justified (Gehrels 1983; Tsai 1989).

However, while a foreign investor finally wants to repatriate earned profits, the host country government intends to extract a certain share of the surplus generated from an investment project. A host country's tax on foreign profits will also lead to a shift of capital and labor from foreign to local companies and thus increase local factor income (Radke 1992, Chapter 6). The problem for the government is to determine an optimal level of taxation that does not deter companies from investing in the first place. The bargaining process between governments and foreign investors can be represented by a strategic game where taxes and investment levels are players' options, while profits and tax revenues are the pay-offs (Andersson 1991, p.49-72; Brander and Spencer 1987).<69>

Apart from direct profit taxation, other government interventions like trade policies will also alter the effects of FDI. Foreign investment in less developed as well as transition countries is often concentrated in technology-intensive industries where distorting trade policies are in place. If the entry into a certain sector is prohibited by import tariffs, FDI might be the only possibility to gain market access.<70> However, with import restrictions and high domestic prices there will be a trade-off for the host country between welfare losses from the policy intervention and gains from FDI. The overall welfare effect will be ambiguous and depending on the specific policy instrument in place.<71> Generally, in a partial equilibrium setting a pure capital inflow into a non-distorted sector is always beneficial to the host economy (MacDougall 1960). In contrast, several studies using the Heckscher-Ohlin-Samuelson general equilibrium approach (e.g. Bhagwati 1973; Markusen and Melvin 1979) derived the result that any small inflow of foreign capital into a tariff-protected, capital-intensive sector has a negative welfare impact, unless foreign profits are taxed. In a model with limited factor mobility and non-traded goods, Tsai (1987) shows that investment in the exportable sector is always beneficial to the host country. However, the welfare effect of FDI into a tariff-protected importable


165

sector might be positive or negative, depending on model and parameter specifications (Sechzer 1988; Anam and Supapol 1992).

5.3. Recent Developments of Foreign Direct Investment Flows into Transition Economies

During the process of economic transition CEEC became a major scope for foreign capital, and the region is now playing an important role in global resource flows (Svetlicic et al. 1993). It must be mentioned, though, that there are severe statistical problems in collecting reliable data on FDI in transition countries. Only slowly are these countries adopting the definition used by organizations like the IMF in which an FDI enterprise must have at least a ten percent foreign share in its capital (UNECE 1995, p.68). Practice varies within the region, and it is difficult to find unambiguous information. The UNECE collects statistical data from various national sources, i.e. national banks, balance-of-payments statistics, and investment agencies, with an industry disaggregration according to international standards in trade classification.

Figure 5.1 presents the recent development of cumulative FDI inflows into transition economies. In all countries FDI stocks have been rapidly increasing between 1992 and 1996. Detailed numbers for various countries are given in Appendix A-5.1.

Figure 5.1: Cumulative FDI inflows into CEEC (1992-1996)

Source: UNECE (1996)


166

Total FDI stocks in CEEC were at a level of 48 billion US$ in July 1996, of which 73 percent have been invested in the CEC-7 and 27 percent in the FSU. The distribution of cumulative investment inflows among individual countries is very uneven. Hungary takes the biggest share with 29 percent of the whole region's FDI stock in 1996, followed by Poland, Russia and the Czech Republic ( Table 5.1 ). Hungary also has one of the highest FDI per capita ratios, second only to Slovenia which experienced the highest annual per capita inflow in 1995. On a per-capita basis, the Czech Republic, Estonia and Poland are also among the more attractive investment locations. The least successful countries in acquiring FDI are the FSU, except the Baltics and Kazakhstan, as well as Bulgaria and Romania.

Table 5.1: Country distribution and per-capita FDI in various countries

Country Country Share in total FDI

FDI inflow in 1995

Cumulative FDI inflow 1992-1996

Ratio of
FDI inflow
to GDP

Ratio of
FDI stock
to GDP

Ratio of Gross Domestic Investment to GDP

 

% in 1996 US$ per capita

% in 1995

Belarus 0.7

4

32

0.2

1.5

25.0

Estonia 1.5

142

438

5.0

15.5

27.0

Latvia 1.0

78

194

3.4

8.4

21.0

Lithuania 0.8

30

95

1.6

7.0

19.0

Moldova 0.2

14

20

1.6

2.3

7.0

Russian Federation 13.7

17

40

0.8

1.5

25.0

Ukraine 2.3

8

17

0.5

0.9

25.0

Kazakhstan 6.8

53

168

4.0

12.6

22.0

FSUa 26.9

19

48

0.9

2.1

24.6

Bulgaria 1.3

13

62

1.0

4.9

21.0

Czech Republic 12.6

248

541

6.4

16.9

25.0

Hungary 28.9

373

1346

9.1

35.0

23.0

Poland 18.9

105

203

3.8

8.4

17.0

Romania 3.9

21

71

1.4

5.6

26.0

Slovakia 1.7

33

136

1.1

6.0

28.0

Slovenia 5.9

568

1387

6.9

19.7

22.0

CEC-7 73.1

126

337

4.6

14.2

21.4

CEEC (Average) -

51

135

2.3

6.0

23.5

Argentina -

113

772b

1.4

8.1c

18.0

United Kingdom -

514

4172b

2.9

20.9c

16.0

a Not all of the newly independent states are listed due to missing data.
b Total FDI stock.
c Numbers for the year 1994.

Source: UNECE (1996); UNCTAD (1996); World Bank (1997).


167

In terms of FDI inflows related to GDP, several transition countries have reached levels which are significantly above Western market economies. For matter of comparison in Table 5.1 numbers are also given for Argentina as a representative of the "upper middle income" group of countries (World Bank 1997) and the United Kingdom (UK) as an industrialized country. When these figures are compared, however, it has to be taken into account that the level of GDP per capita in CEEC is still very low, on average about 2300 US$ in 1995. Table 5.1 shows the highest ratio of annual FDI to GDP in 1995 at 9 percent for Hungary. Comparable figures for Argentina and the UK are 1.4 percent and 2.9 percent, respectively (UNCTAD 1996, p.64). In several CEEC, total FDI stocks in 1995 as compared to GDP were also higher than in Argentina. In Hungary, Slovenia, Czech Republic and Estonia, FDI stocks were even comparable to the UK. Moreover, in the most attractive locations, like Hungary and Slovenia, FDI inflows in 1995 were equivalent to about a third of annual gross domestic investment.

In Hungary, as the most popular location for foreign investors among the CEEC, FDI already in 1993 played an important role in the economy, which is especially apparent in the food industry ( Table 5.2 ).

Table 5.2: The share of foreign companies in the Hungary economy (percentage shares in 1993)

 

Food Industry

All Sectors

Employment

36.7

20.2

Sales

51.3

33.1

Exports

59.6

50.4

Source: UNECE (1994).

The share of foreign companies in overall employment, sales and exports in the food industry is higher than on average in the economy. There is a rising trend in these numbers, but the latest data available for the food industry are for 1993. While foreign companies in Hungary are significantly more trade-oriented than local competitors, their imports exceeded their exports and, hence, they have contributed to the foreign trade deficit in Hungary in recent years (UNECE 1996, p.31-32).

Figure 5.2 provides the sector distribution of cumulative FDI stocks in CEC-7 and FSU. Detailed percentage shares for individual countries are provided in Appendix A-5.1.


168

Figure 5.2: Sector distribution of FDI in transition countries (1996)

Source: UNECE (1996).

From UNECE statistics we can disaggregate five sectors that are suitable for the empirical simulations in this paper: agriculture, food processing, primary products<72>, manufactures, and services. Major FDI flows went into the service sector in both regions, i.e. 45 percent in CEC-7 and 40 percent in FSU. Food processing received about 12 percent of all FDI in CEC-7 and about 8 percent in FSU. A striking difference between the two regions occurs in primary products, which is due to the importance of FDI in the petroleum and gas industry in Kazakhstan. Agriculture received a negligible share of foreign capital in both regions.

5.4. Implementation of Foreign Direct Investment in the Modeling Framework

Empirical case studies on the role of FDI in transition economies have been mostly descriptive without using explicit economic models.<73> One way of determining the influence of FDI on host countries' economic development would be time series analysis (O'Sullivan 1993). However, foreign investment activities in CEEC have only started at the beginning of the 1990s and there are no sufficient time series available on FDI flows and major economic indicators. On the other hand, a multi-sector AGE


169

model provides an opportunity for simulation exercises and seems an appropriate tool for modeling the effects of foreign capital flows into transition economies.

The model applied in this paper was developed by the Global Trade Analysis Project (GTAP). The GTAP model is a standard applied general equilibrium model which is described in detail in Hertel and Tsigas (1997). It is written and solved using the GEMPACK modeling software (Harrison and Pearson 1996). A comprehensive database was collected from a variety of international sources and is described in McDougall (1997). It consists of 30 regions and 37 sectors on a global level. Regions and sectors can be easily aggregated according to specific problem settings. However, with respect to transition economies the availability of national input-output tables and other relevant data is rather limited (Wahl and Yu 1997). The GTAP database covers only two aggregate model regions in this area, the CEC-7 and the FSU. Moreover, the model economy consists of 10 sectors, each producing one output only:

In the standard model, regional endowments of primary factors of production, i.e. land, labor, and capital, are fixed. Capital and labor are only mobile between sectors and land as a so-called sluggish endowment is sector specific. McDougall and Ianchovichina (1996) introduce international capital mobility into the GTAP model, but due to missing data on a global level they do not distinguish bilateral, sector-specific capital flows.

In order to model an exogenous inflow of FDI, the regions under consideration have to be isolated within the multi-region AGE framework. This can be done by fixing the relevant trade linkages and keeping prices and income constant in all other model regions. Then, the data on capital flows into CEEC described in the previous section are used for defining the relevant shocks to the model. Technically, the regional endowment of capital in CEC-7 and FSU is increased by the overall inflow of FDI, while specific use of capital in each sector is increased according to the distribution of FDI in both


170

regions.<74> It is assumed that the CEC-7 and the FSU are comparatively small economies and act as price takers on the international capital market.

In the model experiments, overall balance-of-payments changes are neglected. Normally, in a general equilibrium model one would expect that an exogenous inflow of capital into a country, ceteris paribus, would cause the balance of trade to deteriorate in order to keep external accounting balanced. However, in the present simulations the overall balance of trade for the model regions is held constant for several reasons. FDI, as already mentioned in Section 5.2 , indirectly affects the balance of trade in both directions through additional exports on the one hand and imported inputs on the other. Moreover, in the case of transition countries significant capital outflows in recent years, due to political instability and uncertainty, have to be taken into account. It can be assumed that in some countries, e.g. the Russian Federation, the net balance of capital flows was even negative, i.e. more capital left the country than came in. Detailed data on FDI outflows from transition countries are hardly available and they are neglected here (UNECE 1996, p.5).

In addition to the pure increase in capital endowment, the model experiments should also capture employment effects of FDI as well as externalities arising from technology transfer. Since labor market imperfections and other rigidities to the adjustment process prevail in transition economies, two options are considered with respect to labor mobility. Although the model always generates full employment, the inter-sectoral movement of labor can be restricted. In the scenarios, labor is treated as being either perfectly mobile between sectors (M)<75> or sluggish (S), which means that employment shifts between sectors are determined by a relatively small elasticity of transformation.<76> In the sluggish case wages differ across sectors, while under perfect labor mobility the wage rate will be equal throughout the economy.

Technology transfer is implemented in the model as an increase in total factor productivity (TFP) in those sectors which actually receive FDI. The options are either no change in TFP (O) or an increase in a certain proportion to the sector-specific FDI


171

inflow (T ). In combining these options with regard to labor and technology, the following four modeling experiments can be defined ( Table 5.3 ).

Table 5.3: Description of FDI experiments

Technology transfer rarrdarr Labor market

No increase in TFPa (O)

TFPa increase in proportion to capital inflow (T)

Perfect labor mobility
between sectors (M)

MO

MT

Imperfect labor mobility
between sectors (S)

SO

ST

a TFP = Total factor productivity.

The GTAP model is formulated in percentage changes which requires that all exogenous shocks are also being defined in relative terms. In order to determine the increase in capital endowment in CEC-7 and FSU between 1992 and 1996, cumulative FDI inflows into each sector up to 1996 are divided by the value of capital endowment in 1992, the reference year of the GTAP database. FDI inflows into transition countries before 1992 were very small and they are neglected here. For simplicity FDI stocks in primary agriculture are set equal to zero, since on average they amount to less than 1 percent of local endowment in the database.<77> The UNECE is not providing any detailed information on FDI in the three food processing sectors of the model. Instead, additional information from the Polish Agency for Foreign Investment (PAIZ 1995) is used to split total FDI within the food industry into milk, meat and other processed products.

There is still another problem in determining the relevant FDI shocks for the model simulations. The exercises are conducted on a highly aggregated level. From the data it is not clear whether FDI primarily contributes to an increased supply of variable inputs, i.e. short-term liquid assets, or rather an increase in the overall value of fixed assets in the host country, i.e. total capital stock. Both cases are possible, but it seems more likely that FDI will mainly consist of fixed assets like buildings and large machinery. In this case, the ratio between the amount of inward FDI and local capital endowment and, hence, the shocks implemented in the simulations are relatively low. Table 5.4 provides the percentage increases in capital endowment implemented in the model sectors of CEC-7 and FSU. If, however, FDI became immediately fully effective as production capital, the relevant percentage increases in local capital were significantly higher. The


172

corresponding shocks in this case are provided in Table 5.4 in brackets. These high shocks may represent an upper bound to the impact of FDI on the host economy, while the low shocks can be viewed as a more realistic scenario. The comparison of the low-shock and high-shock scenarios may serve as a kind of sensitivity analysis with respect to the overall impact of FDI in the simulations.

Table 5.4: Capital and TFPa shocks implemented in the model (percent increase; high-shock scenarios in brackets)

 

CEC-7

FSU

 

Capital TFPa Capital

TFPa

Agriculture

0.0

(0.0) 0.0 (0.0)

0.0

(0.0)

0.0

(0.0)

Meat

4.5

(37.1) 0.5 (3.7)

1.4

(13.8)

0.1

(1.4)

Milk

9.5

(79.3) 1.0 (7.9)

1.5

(15.7)

0.2

(1.6)

Other food products

8.7

(72.3) 0.9 (7.2)

1.7

(17.3)

0.2

(1.7)

Manufactures

9.6

(79.4) 1.0 (7.9)

1.0

(10.2)

0.1

(1.0)

Services

4.7

(38.9) 0.5 (3.9)

0.4

(4.2)

0.04

(0.4)

Primary products

0.6

(4.6) 0.1 (0.5)

1.8

(18.4)

0.2

(1.8)

Total

5.8

(48.1)

 

 

0.7

(7.2)

 

 

a TFP = Total factor productivity.

Source: Calculated from UNECE (1996) and the GTAP database (McDougall 1997).

As could be expected from the statistical data on FDI ( Figure 5.1 ), the relative increases in capital are much higher in CEC-7 than in FSU. Cumulative inflows of FDI between 1992 and 1996 increase the value of the total capital stock by 5.8 percent in CEC-7 and 0.7 percent in FSU. If compared to the value of endowment capital, the share of all FDI inflows would be 48 percent in CEC-7 and 7.2 percent in FSU. The sector-specific relative increases reflect the distribution of FDI as illustrated in Figure 5.2 .

Finally, the technology transfer effect has to be defined, i.e. the increases in total factor productivity caused by FDI. Generally, there is hardly any information available about the sector-specific technological gap between foreign and local production in transition countries. Neither is the time span known which would be necessary to fully implement advanced technologies in these economies. Hence, the following assumptions are made about the total technology transfer effect related to FDI. Any firm in the CEEC with some degree of foreign capital participation can on average realize a 10 percent increase in total factor productivity during the simulation period, i.e. between 1992 and 1996. Of course, in reality productivity might increase by much more depending on sector and


173

country specifics.<78> Although this estimate seems modest, it may be justified for the start-up phase of FDI projects in such a heterogeneous region like the CEEC. A 10 percent productivity increase for firms with foreign participation is then adjusted for the whole sector according to the foreign capital share. To give an example, if the share of FDI in capital endowment is 9.6 percent, as in manufactures in CEC-7, the total factor productivity for the sector as a whole is raised by 0.96 percent, and likewise for the other sectors.<79> Table 5.4 summarizes the changes in TFP for CEC-7 and FSU, with the high-shock scenarios provided in brackets.

5.5. Simulation Results

The objective of the AGE model application in this paper is to quantify some of the theoretical effects of FDI, as discussed in Section 5.2 , in the context of the CEEC. The current version of the model provides results with respect to changes in total output in the various sectors as well as trade and employment effects in the model economies. Hence, it is possible to assess the overall expansion effect due to an increased capital endowment and the accompanying technology transfer. However, since the assumption of perfect competition is employed throughout, changes in the competitive situation on host country markets are not captured at this stage. Likewise, the interaction between FDI, local taxation and trade policy intervention has not been implemented in the present simulations. In the following paragraphs, only the results for the more realistic low-shock scenarios are discussed. The corresponding figures for the high-shock scenarios are provided in Appendix A-5.3.

The model results can be summarized by the changes in total GDP ( Figure 5.3 ). In
CEC-7, the pure capital transfer effect yields an expansion of total GDP by 1.8 percent for the time period under consideration. The results for labor being mobile or sluggish are very similar (MO, SO). This amounts to an annual growth rate of about 0.4 percent over 4 years. If technology transfer is taken into account, the cumulative expansion of GDP rises to about 3 percent over the simulation period, i.e. about 0.8 percent per year in scenario MT and 0.7 percent per year in scenario ST. The maximum expansion under the high-shock assumption would amount to 6.1 percent per year, or about 27 percent in


174

total, in scenario MT.<80> If the low-shock scenarios are taken as the more realistic ones, it can be stated that the overall contribution of FDI to economic growth in CEC-7 was on average a little less than one percent per year up to 1996. The figures for the FSU are much smaller, and the various scenarios differ only slightly from each other. Scenario ST shows the highest growth rate at 0.9 percent in 4 years, i.e. about 0.2 percent per year.

Figure 5.3: Expansion of GDP due to FDI between 1992 and 1996 in the low-shock scenarios

Source: Own calculations.

Next, the structural changes within the model regions will be discussed. Table 5.5 shows that under the low-shock assumption output effects due to FDI are not very large in either of the two regions. In CEC-7 the strongest increase in all scenarios accrues to the manufacturing sector, followed by other food products, services and milk. With mobile labor the pure capital enhancement effect causes manufacturing output to grow by 3.4 percent (scenario MO). Food production rises between 1 and 2 percent, similar to services and primary products. Agriculture also gains from increased production in the other sectors, but only less than 1 percent. If technology transfer is considered according to the assumptions explained earlier (MT), there is, of course, an additional positive output effect in those sectors receiving FDI. However, in the model an increase in total factor


175

productivity also has an input saving effect. Hence, in scenario MT those sectors with little or no FDI inflows experience a lower growth rate than under pure capital transfer. This result is dependent on the type of technology that is implemented. If the technical change were non-neutral, e.g. labor saving, spillover effects from food processing to agriculture were probably different. In the scenarios where labor is not perfectly mobile between sectors the output effects are slightly stronger in sectors with FDI inflows and weaker in sectors without FDI. This is due to the fact that the model always ensures full employment in the whole economy. An FDI inflow leads to a substitution of capital for labor, but if less labor can move out of the sector as compared to the mobile scenario, it will eventually be used in production and cause higher output. Of course, there are also changes in relative factor prices involved which will be discussed below. The results indicate that about two thirds of the total output change can be attributed to capital enhancement, while about one third is due to technology transfer effects.

Table 5.5: Changes in output due to FDI between 1992 and 1996 in the low-shock scenarios ( in percent)

 

 

MO

MT

SO

ST

CEC-7 Wheat

0.9

0.6

0.7

0.5

 

Coarse grains

0.9

0.6

0.7

0.5

 

Non-grain crops

0.6

0.5

0.2

0.2

 

Livestock

0.9

0.8

0.7

0.8

 

Meat

0.9

1.4

1.0

1.5

 

Milk

1.6

2.4

2.5

3.4

 

Other food products

2.0

2.9

2.9

3.9

 

Manufactures

3.4

4.7

3.8

4.3

 

Services

1.9

2.4

1.8

2.7

 

Primary products

0.8

0.5

0.2

0.2

FSU Wheat

- 0.2

- 0.4

- 0.3

- 0.4

 

Coarse grains

0.0

- 0.1

0.0

- 0.1

 

Non-grain crops

0.2

0.2

0.2

0.2

 

Livestock

0.2

0.2

0.3

0.3

 

Meat

0.2

0.3

0.3

0.4

 

Milk

0.2

0.3

0.4

0.5

 

Other food producst

0.3

0.4

0.5

0.6

 

Manufactures

0.2

0.2

0.2

0.3

 

Services

0.2

0.3

0.2

0.3

 

Primary products

1.0

1.1

1.2

1.4

Source: Own calculations.


176

Under the assumption that FDI capital becomes more directly effective in production, i.e. the high-shock scenarios shown in Appendix A-5.3, output rises as much as 38 percent for manufactures in scenario MT. This would be equivalent to an annual increase of about 8.5 percent over the four-year period of the simulation. These results seem to be unrealistically high, especially if compared to the real numbers, where output in many sectors in the transition economies did not grow but rather dropped between 1992 and 1996. It was mentioned earlier that the high-shock scenarios should be considered as an upper bound to the possible FDI impact.

Production effects in FSU as a consequence of FDI inflows are very low which could be expected from the FDI data discussed earlier. Here primary products like mining and energy stand out as the sector most strongly affected. But even if technology transfer and labor immobility is taken into account, the output effect only amounts to 1.4 percent in scenario ST. An interesting observation can be made in the FSU as compared to CEC-7. Grain production is negatively affected by FDI in the food industries. This can be explained by the fact that input substitution effects dominate the comparatively small expansion effect due to the capital inflow.

The output effects just discussed also cause changes in trade which are provided in Table 5.6 . Two aspects are to be considered with respect to the trade effects. First, increased output due to FDI inflows causes exports to rise and imports to fall as locally produced goods are substituted for imported commodities. This improves a sector's trade balance. On the other hand, increased domestic production also leads to increasing imports of intermediate inputs from other sectors. This affects the trade balance in the other direction.

It becomes clear from Table 5.6 that sectors in CEC-7 which are more attractive to FDI, i.e. manufactures, milk, and other food products, experience an increase in exports between 4 and 7 percent in the scenarios with mobile labor, and between 5 and 13 percent in the scenarios with sluggish labor. Imports in milk and other food products fall which indicates that in these sectors local production of foreign investors is substituted for imported goods. On the other hand, imports in manufactures rise which indicates a rising demand for intermediate inputs. The trade balance for meat products deteriorates, even though domestic production is rising. Apparently, the intermediate input relationships are the dominating effect in this case.


177

Table 5.6: Changes in exports and imports due to FDI between 1992 and 1996 in the low-shock scenarios (in percent)

 

 

MO MT SO

ST

 

 

Exports

Imports

Exports

Imports

Exports

Imports

Exports

Imports

CEC-7 Wheat

- 3.4

3.2

- 6.1

4.6

- 7.4

5.7

- 9.1

6.7

 

Coarse grains

- 3.0

3.0

- 5.5

4.2

- 6.7

5.2

- 8.3

6.1

 

Non-grain crops

- 3.5

3.4

- 6.4

5.2

- 6.9

5.6

- 9.0

7.1

 

Livestock

- 3.5

3.2

- 6.6

5.1

- 7.7

5.9

- 9.7

7.3

 

Meat

- 0.4

1.6

- 1.4

2.7

- 0.3

1.7

- 0.4

2.3

 

Milk

4.1

- 1.1

5.3

- 0.9

8.8

- 3.1

11.2

- 3.6

 

Other food prod.

5.8

- 1.1

6.9

- 0.9

10.9

- 3.0

13.2

- 3.2

 

Manufactures

4.3

1.2

6.6

1.1

5.0

1.1

5.7

1.3

 

Services

0.2

2.0

- 1.2

3.3

- 0.7

2.5

0.8

2.1

 

Primary products

- 4.2

4.9

- 7.1

6.4

- 7.1

6.3

- 8.4

7.1

FSU Wheat

- 0.6

0.2

- 1.0

0.2

- 0.9

0.3

- 1.1

0.3

 

Coarse grains

2.5

0.4

3.7

0.5

4.7

0.6

5.6

0.7

 

Non-grain crops

- 0.3

0.3

- 0.6

0.3

- 1.0

0.6

- 1.2

0.6

 

Livestock

0.1

0.5

0.1

0.7

- 0.1

0.9

0.0

1.0

 

Meat

0.1

0.3

0.3

0.4

0.3

0.3

0.5

0.3

 

Milk

0.0

0.2

0.1

0.3

0.3

0.2

0.5

0.1

 

Other food prod.

0.4

0.1

0.8

0.1

1.3

- 0.2

1.8

- 0.4

 

Manufactures

- 0.6

0.7

- 0.6

0.8

- 0.6

0.8

- 0.7

0.9

 

Services

- 1.0

0.9

- 1.4

1.2

- 1.8

1.4

- 1.9

1.5

 

Primary products

3.2

- 0.3

3.9

- 0.6

3.8

- 0.5

4.5

- 0.7

Source: Own calculations.

For all primary sectors in CEC-7 the trade balance also deteriorates. More of the local production in agriculture and other primary products is now used as an input in food industries, manufactures and services. However, the increased input demand by foreign firms is partly served through imports of agricultural and primary products which rise between 3 and 7 percent. The questions arises why an increased demand for raw products, e.g. in the food industry, is not completely served by local agricultural producers. Usually this is what most observers in transition countries would expect from FDI in food processing facilities. In the model, this result can be technically explained by the proportion between imported and domestic intermediate inputs which are not completely substitutable. Hence, a rising local demand for a product automatically causes imports to rise in a certain proportion. This seems not too unrealistic, given the fact that many local raw products in transition countries do not fulfil certain quality


178

standards. Especially, if a foreign investor produces for export markets, part of the intermediate inputs will probably have to be imported.

In the FSU the trade figures do not change much in any of the scenarios which corresponds to the small production changes reported in Table 5.5 . Only in primary products, e.g. oil and gas, as well as coarse grains and other food products the trade balance slightly improves, with exports rising between 1.8 and almost 6 percent in scenario ST. These raw commodities traditionally have an important share in FSU exports.

Next, the effects of FDI on domestic factor prices will be discussed which are shown in Table 5.7 .

Table 5.7: Changes in average factor prices due to FDI between 1992 and 1996 in the low-shock scenarios (in percent)a

 

 

MO

MT

SO

ST

CEC-7 Land

3.2

4.3

5.1

6.3

 

Labor

1.3

2.8

3.0

4.1

 

Capital

- 3.1

- 1.7

- 5.7

- 4.7

FSU Land

0.6

0.8

1.5

1.7

 

Labor

0.5

0.8

0.9

1.1

 

Capital

- 0.1

0.1

- 0.3

- 0.1

a Factor prices are weighted averages over all sectors.

Source: Own calculations.

Generally, due to FDI the price for capital in the host country tends to fall, while wages and land rents tend to rise. In CEC-7, an increased capital supply in food industries, manufactures and services causes overall rental rates to decline between about 2 and 6 percent. The decrease in the rental rate is smallest in scenario MT and strongest in scenario SO. When labor is sluggish, it is more difficult to substitute capital for labor and, hence, the price for capital falls more. Land rents in CEC-7 increase between 3 and 6 percent in the various low-shock scenarios. Technology transfer has an additional positive effect on value added of land in scenario MT, and a sluggish labor market also tends to increase land rents in scenarios SO and ST. The latter implies that more land and less labor is used in production, and since land is also a sluggish factor this drives up land rents. In the FSU, land rents change significantly only in the high-shock scenarios which are shown in the Appendix A-5.3.


179

Changes in average wages have to be seen in connection with sector-specific employment effects which will be discussed below ( Table 5.8 ). Wages rise in CEC-7 on average between 1 and 3 percent in scenarios with mobile labor and between 3 and 4 percent with labor being sluggish. Again, the overall output growth in the economy tends to increase the marginal value product of labor and thus wages. This effect is even more pronounced with additional technology transfer (MT). When labor is imperfectly mobile, differences in wages occur between sectors with and without FDI inflows. In contrast to the average increases, which are shown in Table 5.7 , sector-specific wages in the food industry do hardly change. In the FSU the effects are very small throughout the scenarios.

Changes in factor prices are partly determined by factor movements between sectors ( Table 5.8 ).

Table 5.8: Changes in labor use due to FDI between 1992 and 1996 in the low-shock scenarios (in percent)

 

 

MO

MT

SO

ST

CEC-7 Wheat

1.3

0.9

0.7

0.6

 

Coarse grains

1.3

0.8

0.7

0.6

 

Non-grain crops

0.9

0.8

0.2

0.3

 

Livestock

1.3

1.1

0.8

0.9

 

Meat

- 3.1

- 3.0

- 2.8

- 2.6

 

Milk

- 6.1

- 6.5

- 4.0

- 4.1

 

Other food products

- 4.3

- 4.3

- 2.4

- 2.2

 

Manufactures

- 0.4

0.1

0.3

0.4

 

Services

0.3

0.2

0.0

- 0.1

 

Primary products

1.2

0.4

0.1

- 0.1

FSU Wheat

- 0.3

- 0.6

- 0.3

- 0.4

 

Coarse grains

- 0.1

- 0.2

- 0.1

- 0.1

 

Non-grain crops

0.1

0.1

0.1

0.1

 

Livestock

0.1

0.1

0.2

0.2

 

Meat

- 0.9

- 1.0

- 0.7

- 0.8

 

Milk

- 0.9

- 1.0

- 0.6

- 0.7

 

Other food products

- 0.9

- 1.0

- 0.6

- 0.6

 

Manufactures

- 0.2

- 0.4

- 0.2

- 0.2

 

Services

0.1

0.2

0.1

0.1

 

Primary products

- 0.3

- 0.5

0.2

0.1

Source: Own calculations.


180

Here the focus is only on changes in labor use, because land is primarily used in agricultural production, and the changes in capital use are exogenously determined by the FDI inflows in the model simulations. In CEC-7, labor is partly substituted for by foreign capital in those sectors which receive a higher proportion of FDI. This effect is stronger in sectors which have a relatively small share in overall employment, e.g. the food industries. Small sectors can more easily adjust their employment without affecting average wages in the economy too much. In contrast, labor use in a relatively large sector, like manufactures, stays almost at the same level in all scenarios. In the high-shock scenarios, labor is heavily reduced only in the food industries.<81> Employment effects in the FSU are generally very small. Together, the changes in wages and sector-specific labor use in both regions imply that total labor income is reduced in the food industries, whereas it is increased in agriculture and other sectors of the economy.

The labor movement between food industries and primary agriculture in the model needs some special attention. About a third of the labor force moving out of food processing in CEC-7 is absorbed by the agricultural sectors. This is a theoretically consistent reaction, as agriculture does not receive any additional capital through FDI and tends to increase its factor demand on the labor market instead. However, in reality one would expect that employment in agriculture would continuously decrease over time and labor would only shift into other sectors of the economy, e.g. manufactures and services. Moreover, in the transition process many people remain unemployed, which is not possible in the model calculations. On the other hand, social security systems are not yet fully developed in most transition countries, and part of increased agricultural labor use in the present model experiments could probably be explained by subsistence production in rural areas. Moreover, many agricultural enterprises have set up their own processing plants in order to circumvent highly concentrated food industries. If the food industry as a whole became more competitive through FDI, small processing plants in rural areas would have to close down, while workers would go back into farming or become unemployed. Taking these effects into account is beyond the capabilities of the model at this point. A very rigid approach to modeling agricultural employment would be to just fix the amount of labor used in these sectors. This would force abundant labor from food industries into


181

manufactures and services.

In general, the differences in labor movements between the mobile and the sluggish scenarios are not as large as expected. Most of the adjustment is absorbed by sector-specific wage changes, and additional employment effects due to increased TFP are negligible. This indicates that imperfect labor market conditions, as they can be observed in transition countries, are not really reflected in the current model formulation and require a more elaborate approach. However, treating labor as a sluggish endowment at least provides a starting point for further extensions in modeling labor market rigidities and real unemployment.

5.6. Conclusions

In this paper, the economic impact of foreign direct investment in Central European countries (CEC-7) and the Former Soviet Union (FSU) is analyzed using the GTAP framework. Four experiments are designed for modeling pure and combined effects of capital and technology transfers. Imperfect labor mobility between sectors is also taken into account. The results crucially depend on assumptions about the nature of foreign capital that is transferred into transition economies. If FDI consisted mainly of short-term variable assets, as covered in the high-shock scenarios here, the immediate effects on economic growth would be much stronger than in the case where foreign capital would take the form of long-term fixed assets, like in the low-shock scenarios. The latter seems a more realistic assumption and, hence, the short-term impact of FDI on the host economies in the CEEC region is relatively modest.

The simulation period includes the years 1992 up to 1996. In the model, a cumulative expansion of GDP due to FDI is calculated between 2 and 3 percent in CEC-7, and less than 1 percent in FSU. This amounts to an average annual growth rate between 0.4 and 0.8 percent in CEC-7 and 0.2 percent in FSU. In the less likely case of the high-shock scenarios, the annual growth rate due to FDI goes up to 6.1 percent in CEC-7 and 2.1 percent in FSU. The model results also support the proposition that technology is weighing importantly in FDI activities. In connection with observed FDI flows even a technology transfer effect as modest as the one assumed here accounts for about half of the overall growth effects.

As far as domestic primary factor use is concerned, labor is moving out of sectors with relatively high FDI shares. Substitution effects due to cheaper capital are dominating the


182

expansion effect related to rising output. In the model, labor is moving out of the food industries into other sectors of the economy, including agriculture and other primary products. This results certainly over-simplifies the situation in transition economies, where rural unemployment is often a serious problem. But it also indicates that the transfer of capital intensive technologies might in the short-run rather aggravate the problem of local unemployment in the host countries. The implementation of labor market rigidities in the model does not change the results significantly. Although it somewhat reduces the quantity changes in factor use, most of the adjustment is absorbed by sector-specific wage changes.

Domestic agricultural production is gaining little from increased output in the processing industries. Improved technology in these sectors leads to more efficient use of raw products, and more intermediate agricultural inputs are being imported. However, over time there may be spillovers from the processing stage to primary agriculture, as foreign firms tend to provide training and advanced inputs to their raw product suppliers.

There are several possible directions for further research starting from this paper. First, the model results would certainly become more realistic, if the possibility of real unemployment could be implemented. Second, the nature of technology transfer and spillovers remain to be analyzed in more detail. Instead of a neutral change in TFP, e.g. labor-augmenting or intermediate-input-augmenting technical change could also be considered. Third, the influence of distorting trade policies on the welfare effects of FDI have been mentioned in theory, but so far not implemented in an AGE model. Likewise, the impact of foreign firms on local competition should be taken into account. Imperfect competition seems especially relevant to the agro-food sector in transition countries, where monopsonistic structures prevail in the processing industries.<82> Finally, more attention should be given to the significant capital outflow that occurred over the last years, especially in FSU, due to economic and political instability. This would be very difficult, however, since these transactions often take place on the black market and data are hardly available.


183

In reality, the potential positive effects related to FDI have been overshadowed by political and economic factors driving in the opposite direction. Until 1994 most CEEC still had negative rates of GDP growth (OECD 1996). Since then FDI has certainly contributed to the positive development which is reflected in the presented model results. However, the analysis in this paper also shows that the overall impact of FDI in the initial stages of the transformation process should not be overestimated. FDI should not be seen as a major source of finance, but rather as a basis for productivity growth and a nucleus in the transition economies which, in the long-run, might generate spillover effects that exceed the initial resource inflow.

5.7. References

Anam, M.; Supapol, A.B. (1992): "Protection, Terms of Technology Transfer and Foreign Investment: A Welfare Analysis. " In: International Economic Journal 6 (4), p.75-83.

Andersson, T. (1991): Multinational Investment in Developing Countries. A Study of Taxation and Nationalization. London.

Artisien, P.; Rojec, M.; Svetlicic, M. (eds.) (1993): Foreign Investment in Central and Eastern Europe. New York.

Batra, R.N. (1986): "A General Equilibrium Model of Multinational Corporations in Developing Economies. " In: Oxford Economic Papers 38, p.342-353.

Bhagwati, J.N. (1973): The Theory of Immiserizing Growth: Further Applications. In: Connolly, M.B., Swoboda, A.K. (eds.): International Trade and Money. London, p.45-54.

Brander, J.A., Spencer, B.J. (1987): "Foreign Direct Investment with Unemployment and Endogenous Taxes and Tariffs. " In: Journal of International Economics 22, p.257-279.

Caves, R.E. (1982): Multinational Enterprise and Economic Analysis. Cambridge, Massachusetts.

Dunning, J.H. (1994): Reevaluating the Benefits of Foreign Direct Investment. Discussion Papers in International Investment and Business Studies. University of Reading, Department of Economics, Reading, UK.

Ethier, W.J. (1994): Conceptual Foundations from Trade, Multinational Firms, and Foreign Direct Investment Theory. In: Bredahl, M.E.; Abbott, P.C.; Reed, M.R. (eds.): Competitiveness in International Food Markets. Boulder, p.105-128.


184

Froot, K.A. (ed.) (1993): Foreign Direct Investment. Chicago.

Gehrels, F. (1983): "Foreign Investment and Technology Transfer: Optimal Policies. " In: Weltwirtschaftliches Archiv 119 (4), p.663-685.

Haddad, M.; Harrison, A. (1993): "Are there positive spillovers from direct foreign investment? " In: Journal of Development Economics 42 , p.51-74.

Harrison, W.J.; Pearson, K.R. (1996): GEMPACK User Documentation, Release 5.2, Vol. 1. An Introduction to GEMPACK. Monash University, Clayton, Australia.

Helleiner, G.K. (1989): Transnational Corporations and Direct Foreign Investment. In: Chenery, H.; Srinivasan, T.N.: Handbook of Development Economics, Vol. II. Amsterdam , 1441-1480.

Hertel, T.W. (ed.) (1997): Global Trade Analysis: Modeling and Applications. Cambridge, Massachusetts.

Hertel, T.W.; Tsigas, M.E. (1997): Structure of GTAP. In: Hertel, T.W. (ed.) (1997): Global Trade Analysis: Modeling and Applications. Cambridge, Massachusetts,
p.9-75.

IMF (International Monetary Fund) (1985): Foreign Private Investment in Developing Countries: A Study by the Research Department. Occasional Paper No. 33. Washington D.C.

Licht, F.O. (1989): F.O. Lichts Europäisches Zuckerjournal. Ratzeburg.

Lotze, H. (1997): Foreign Direct Investment with Trade Policies and Imperfect Competition: the Case of the Polish Sugar Industry. In: Loader, R.J.; Henson, S.J.; Traill, W.B. (eds.): Globalisation of the Food Industry: Policy Implications. Reading, UK , p.557-569.

MacDougall, G.D.A. (1960): "The Benefits and Costs of Private Investment from Abroad: A Theoretical Approach. " In: Economic Record 26 , p.13-35.

Markusen, J.R.; Melvin, J.R. (1979): "Tariffs, Capital Mobility, and Foreign Ownership. " In: Journal of International Economics 9 , p.395-409.

McDougall, R.A. (ed.) (1997): Global Trade, Assistance, and Protection: The GTAP 3 Data Base. Center for Global Trade Analysis. Purdue University, West Lafayette, Indiana.

McDougall, R.A.; Ianchovichina, E. (1996): Incorporating Dynamics and International Capital Mobility into the GTAP Model. Research Memorandum. Center for Global Trade Analysis, Purdue University, West Lafayette, Indiana.

Meier, G.M. (1995): Leading Issues in Economic Development. New York.


185

Moran, T.H. (ed.) (1986): Investing in Development: New Roles for Private Capital? Oxford.

OECD (Organisation for Economic Co-Operation and Development) (1991): The Soviet Agro-Food System and Agricultural Trade - Prospects for Reform. Paris.

OECD (Organisation for Economic Co-Operation and Development) (1996): Agricultural Policies, Markets, and Trade in Transition Economies: Monitoring and Evaluation 1996. Paris.

O'Sullivan, P.J. (1993): "An Assessment of Ireland's Export-Led Growth Strategy via Foreign Direct Investment: 1960-1980. " In: Weltwirtschaftliches Archiv 129 (1), p.139-158.

PAIZ (Polish Agency for Foreign Investment) (1995): List of Largest Foreign Investors, February 1995. Warsaw.

Radke, V. (1992): Entwicklung oder Abhängigkeit? - Ökonomische Effekte ausländischer Direktinvestitionen in Entwicklungsländern. Frankfurt.

Safarian, A.E. (1993): Multinational Enterprise and Public Policy. Aldershot.

Sechzer, S.L. (1988): "The Welfare Effects of Foreign Investment in Tariff Distorted Economies. " In: Journal of International Economics 25, p.379-383.

Svetlicic, M.; Artisien, P.; Rojec, M. (1993): Foreign Direct Investment in Central and Eastern Europe: An Overview. In: Artisien, P.; Rojec, M.; Svetlicic, M. (eds.): Foreign Investment in Central and Eastern Europe. New York, p.3-15.

Tsai, P.L. (1987): "The Welfare Impact of Foreign Investment in the Presence of Specific Factors and Non-traded Goods. " In: Weltwirtschaftliches Archiv 123 (3), p.496-508.

Tsai, P.L. (1989): "Foreign Investment, Technology Transfer and Foreign Capital Impact Function. " In: International Economic Journal 3 (2), p.43-56.

UNCTAD (United Nations Conference on Trade and Development) (1996): World Investment Report 1996. New York.

UNECE (United Nations Economic Commission for Europe): Statistical Survey of Recent Trends in Foreign Investment in East European Countries. Various issues. Geneva.

Wahl, T.; Yu, L. (1997): Central European Associates and the Former Soviet Union. In: McDougall, R.A. (ed.): Global Trade, Assistance, and Protection: The GTAP 3 Data Base. Purdue University, West Lafayette, Indiana.


186

Welfens, P.J.J.; Jasinski, P. (1994): Privatization and Foreign Direct Investment in Transforming Economies. Aldershot.

World Bank (1997): World Development Report 1997. Oxford.


187

Appendix A-5.1 Detailed Data on Foreign Direct Investment Flows into Transition Economies

Table A-5.1.1 in this appendix shows data on FDI stocks between 1992 and 1996 for individual transition countries. Table A-5.1.2 provides the sector distribution of FDI for individual transition countries and for the region as a whole in 1996.

Table A-5.1.1: Cumulative FDI inflows into European transition economies by year (Mill. US$)

 

January 1992

January 1993

January 1994

January 1995

January 1996

July
1996
Belarus

 

7.7

263.6

286.8

331.0

347.5
Estonia

 

58.6

221.1

441.5

646.3

697.6
Latvia

 

33.4

74.6

294.3

485.3

496.1
Lithuania

34.4

74.0

191.6

241.9

351.6

375.2
Kazakhstan

 

 

1271.4

1910.1

2769.3

3244.0
Moldova

 

 

7.2

24.8

87.1

104.5
Russian Federation

 

 

2782.9

3364.9

5875.1

6550.2
Ukraine

 

 

219.4

483.5

890.6

1082.9
FSUa Totalb

34.4

173.7

5031.8

7047.8

11436.3

12898.0
Bulgaria

14.1

64.8

191.9

412.4

517.4

609.9
Czech Republic

595.1

1598.3

2166.3

3028.7

5587.2

6045.2
Hungary

3137.0

5501.9

8342.0

9964.8

13740.2

13868.2
Poland

425.0

1370.0

2307.0

3789.0

7843.4

9045.4
Romania

225.8

516.2

651.9

1134.8

1597.2

1887.9
Slovakia

 

231.2

366.0

546.6

726.3

803.1
Slovenia

 

 

709.9

1629.0

2762.1

2806.2
CEC-7c Total

4397.0

9282.4

14735.0

20505.3

32773.8

35065.9
CEECd Total

4431.4

9456.1

19766.8

27553.1

44210.1

47963.9

a Former Soviet Union.
b Other countries in the region are omitted due to missing data.
c EU-Associates in Central Europe.
d All Central and East European transition countries.

Source: UNECE (1996).


188

Table A-5.1.2: Sector distribution of FDI in transition economies (July 1996)

 

Agriculture

Food

Primary products

Manufacture

Services

Total

CEEC (Mill. US$)

350.0

5111.5

3564.9

18154.0

20783.5

47963.9

(Percent)

0.7

10.7

7.4

37.8

43.3

100.0

FSU (Mill. US$)

102.9

1088.9

3307.5

3361.4

5037.2

12898.0

(Percent)

 

 

 

 

 

 

FSU total

0.8

8.4

25.6

26.1

39.1

100.0

Belarus

2.8

3.3

0.0

58.9

35.0

100.0

Estonia

1.2

10.3

3.0

37.2

48.4

100.0

Latvia

0.1

10.3

2.1

12.6

75.0

100.0

Lithuania

2.1

17.5

4.5

29.0

47.0

100.0

Kazakhstan

0.0

4.1

74.6

19.8

1.5

100.0

Moldova

1.1

11.1

0.0

2.2

85.6

100.0

Russian Federation

0.7

9.0

12.8

26.1

51.4

100.0

Ukraine

2.5

14.5

0.0

34.1

48.9

100.0

CEC-7 (Mio. US$)

247.1

4022.5

257.4

14792.6

15746.3

35065.9

(Percent)

 

 

 

 

 

 

CEC-7 total

0.7

11.5

0.7

42.2

44.9

100.0

Bulgaria

0.0

0.0

0.0

34.6

65.4

100.0

Czech Republic

0.0

7.0

0.0

52.0

41.0

100.0

Hungary

1.2

12.1

0.8

34.3

51.6

100.0

Poland

0.3

16.4

0.3

48.5

34.4

100.0

Romania

2.5

15.1

5.3

33.8

43.3

100.0

Slovakia

0.2

2.1

1.1

41.4

55.3

100.0

Slovenia

0.0

4.8

0.0

47.4

47.7

100.0

For explanations see also footnotes in Table A-5.1.1.

Source: UNECE (1996).


189

Appendix A-5.2 GEMPACK Command Files for Scenarios

This appendix lists the command files for implementing the scenarios discussed in section 5.4 in the GEMPACK modeling software. The first file (fdi_mlo.cmf) is completely provided, while the details for the other command files are only given where they differ from the first scenario.





!_____________________________fdi_mlo.cmf_______________________________!

! This GEMPACK command file simulates FDI in CEC-7 and FSU, 

!  with mobile labor, low FDI-shocks, and no technology transfer!_______________________________________________________________________!

!

! Which model

!

auxiliary files = tp1010b ;

!

! Solution method information.

!

method = euler ;

steps = 10 20 30;

!

! files

!

file gtapSETS = set3-03.har;

file gtapPARM = par3-03.dat;

file gtapDATA = dat3-03.har;

!

!

! Next is necessary if reusing pivots is to succeed in multistep simulation !

iz1 = no ;

!

Equations File  = TP3-03 ;

          model = TP1010b ;

          version = 1 ;

          Identifier = GTAP94.TAB with 10x10 data ;

!

! Simulation Specification Section

!

Verbal Description =

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

 Model TP1010b                            

 Experiment "fdi_mlo": FDI in CEC-7 and FSU (food, manufactures, services)

 Labor perfectly mobile, low FDI-shocks, no technology transfer, trade

 balance fixed

 Solution Method: euler 10 20 30                 

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++;

!

! Closure rule

! This is a single-region general equilibrium closure!

Exogenous pop          saveslack govslack 

          ao af afe ava atr

          qo(endw_comm,reg)

! swap incomeslack with y in "reg" except CEC-7 and FSU

           incomeslack("cea") 

           incomeslack("fsu") 

           y("auz")

           y("can")

           y("usa")

           y("jpn")

           y("e_u")


190

           y("eu3")

           y("asia")

           y("row")

! swap profitslack with qo in "reg" except CEC-7 and FSU  

           profitslack(prod_comm,"cea")

           profitslack(prod_comm,"fsu")

           qo(prod_comm,"auz")

           qo(prod_comm,"can")

           qo(prod_comm,"usa")

           qo(prod_comm,"jpn")

           qo(prod_comm,"e_u")

           qo(prod_comm,"eu3")

           qo(prod_comm,"asia")

           qo(prod_comm,"row")

! swap endwslack with pm in "reg" except CEC-7 and FSU

           endwslack(endw_comm,"cea")

           endwslack(endw_comm,"fsu")

           pm(endw_comm,"auz")

           pm(endw_comm,"can")

           pm(endw_comm,"usa")

           pm(endw_comm,"jpn")

           pm(endw_comm,"e_u")

           pm(endw_comm,"eu3")

           pm(endw_comm,"asia")

           pm(endw_comm,"row")

! swap tradslack with pm in "reg" except CEC-7 and FSU

           tradslack(trad_comm,"cea")

           tradslack(trad_comm,"fsu")

           pm(trad_comm,"auz")

           pm(trad_comm,"can")

           pm(trad_comm,"usa")

           pm(trad_comm,"jpn")

           pm(trad_comm,"e_u")

           pm(trad_comm,"eu3")

           pm(trad_comm,"asia")

           pm(trad_comm,"row")

! swap cgdslack with pm("cgds") in "reg" except CEC-7 and FSU; 

! fix trade balance in CEC-7 and FSU

           DTBAL("cea")

           DTBAL("fsu")

           pm("cgds","auz")

           pm("cgds","can")

           pm("cgds","usa")

           pm("cgds","jpn")

           pm("cgds","e_u")

           pm("cgds","eu3")

           pm("cgds","asia")

           pm("cgds","row")

! swap walraslack for psave 

           walraslack 

           to 

!

! The following shocks are used to make sector-specific capital use exogenous

! in all sectors except primary agriculture

!

!swap qfe("capital",trad_comm,"cea") with tf("capital",trad_comm,"cea") 

!swap qfe("capital",trad_comm,"fsu") with tf("capital",trad_comm,"fsu") 

          tf("capital","wht","cea") 

          tf("capital","gro","cea")     

          tf("capital","ngc","cea") 

          tf("capital","olp","cea")     

          qfe("capital","opp","cea")     

          qfe("capital","met","cea") 

          qfe("capital","mil","cea")     

          qfe("capital","ofp","cea") 

          qfe("capital","svces","cea")     

          qfe("capital","mnfcs","cea")     


191

!

          tf("capital","wht","fsu") 

          tf("capital","gro","fsu")     

          tf("capital","ngc","fsu") 

          tf("capital","olp","fsu")     

          qfe("capital","opp","fsu")     

          qfe("capital","met","fsu") 

          qfe("capital","mil","fsu")     

          qfe("capital","ofp","fsu") 

          qfe("capital","svces","fsu")     

          qfe("capital","mnfcs","fsu")     

!

          tf("capital","cgds","cea")

          tf("capital","cgds","fsu")

          tf("labor",prod_comm,reg)

          tf("land",prod_comm,reg)

          tf("capital",prod_comm,"auz")

          tf("capital",prod_comm,"can")  

          tf("capital",prod_comm,"usa")

          tf("capital",prod_comm,"jpn")  

          tf("capital",prod_comm,"e_u")

          tf("capital",prod_comm,"eu3")

          tf("capital",prod_comm,"asia")  

          tf("capital",prod_comm,"row")  ;

Rest Endogenous ;





! FDI shocks to endowment capital

! CEC-7Shock qo("capital","cea") = 5.78;

Shock qfe("capital","opp","cea") = 0.55; 

Shock qfe("capital","met","cea") = 4.47; 

Shock qfe("capital","mil","cea") = 9.54;    

Shock qfe("capital","ofp","cea") = 8.70;

Shock qfe("capital","svces","cea") = 4.68;    

Shock qfe("capital","mnfcs","cea") = 9.55;    





! FSU

Shock qo("capital","fsu") = 0.71;

Shock qfe("capital","opp","fsu") = 1.81; 

Shock qfe("capital","met","fsu") = 1.35; 

Shock qfe("capital","mil","fsu") = 1.54;    

Shock qfe("capital","ofp","fsu") = 1.70;

Shock qfe("capital","svces","fsu") = 0.41;    

Shock qfe("capital","mnfcs","fsu") = 1.00;    





!

! Output File Specification (they are experiment dependent)

!

Save Environment File   fdi_mlo ;

Solution         File = fdi_mlo ;

Log              File = fdi_mlo.LOG ;

!

! Updated data files

!

Updated file gtapSETS = set3-03.upd;

Updated file gtapPARM = par3-03.upd;

Updated file gtapDATA = fdi_mlo.upd;

!

Display file = tp3-03.dis ;

!

! Other Options

!

Extrapolation accuracy file = YES ;

CPU = yes ;

!___________________________End of Command file.__________________


192









!_____________________________fdi_mho.cmf_______________________________!

! This GEMPACK command file simulates FDI in CEC-7 and FSU, 

!  with mobile labor, high FDI-shocks, and no technology transfer

!_______________________________________________________________________!





[...]





! FDI shocks to endowment capital





! CEC-7

Shock qo("capital","cea") = 48.08;

Shock qfe("capital","opp","cea") = 4.57; 

Shock qfe("capital","met","cea") = 37.13; 

Shock qfe("capital","mil","cea") = 79.32;    

Shock qfe("capital","ofp","cea") = 72.34;

Shock qfe("capital","svces","cea") = 38.89;    

Shock qfe("capital","mnfcs","cea") = 79.39;    





! FSU

Shock qo("capital","fsu") = 7.22;

Shock qfe("capital","opp","fsu") = 18.39; 

Shock qfe("capital","met","fsu") = 13.78; 

Shock qfe("capital","mil","fsu") = 15.69;    

Shock qfe("capital","ofp","fsu") = 17.29;

Shock qfe("capital","svces","fsu") = 4.21;    

Shock qfe("capital","mnfcs","fsu") = 10.21;





[...]    

!___________________________End of Command file.__________________


193





!_____________________________fdi_mlt.cmf_______________________________!

! This GEMPACK command file simulates FDI in CEC-7 and FSU, 

!  with mobile labor, low FDI-shocks, plus technology transfer

!_______________________________________________________________________!





[...]





! FDI shocks to endowment capital





! CEC-7

Shock qo("capital","cea") = 5.78;

Shock qfe("capital","opp","cea") = 0.55; 

Shock qfe("capital","met","cea") = 4.47; 

Shock qfe("capital","mil","cea") = 9.54;    

Shock qfe("capital","ofp","cea") = 8.70;

Shock qfe("capital","mnfcs","cea") = 9.55;    

Shock qfe("capital","svces","cea") = 4.68;    





! FSU

Shock qo("capital","fsu") = 0.71;

Shock qfe("capital","opp","fsu") = 1.81; 

Shock qfe("capital","met","fsu") = 1.35; 

Shock qfe("capital","mil","fsu") = 1.54;    

Shock qfe("capital","ofp","fsu") = 1.70;

Shock qfe("capital","mnfcs","fsu") = 1.00;    

Shock qfe("capital","svces","fsu") = 0.41;    





! Technology transfer shocks





! CEC-7

Shock ao("opp","cea") = 0.055;    

Shock ao("met","cea") = 0.447;    

Shock ao("mil","cea") = 0.954;    

Shock ao("ofp","cea") = 0.870;    

Shock ao("mnfcs","cea") = 0.955;    

Shock ao("svces","cea") = 0.468;    

! FSUShock ao("opp","fsu") = 0.181;    

Shock ao("met","fsu") = 0.135;    

Shock ao("mil","fsu") = 0.154;    

Shock ao("ofp","fsu") = 0.170;    

Shock ao("mnfcs","fsu") = 0.100;    

Shock ao("svces","fsu") = 0.041;    





[...]    

!___________________________End of Command file.__________________


194









!_____________________________fdi_mht.cmf_______________________________!

! This GEMPACK command file simulates FDI in CEC-7 and FSU, 

!  with mobile labor, high FDI-shocks, plus technology transfer

!_______________________________________________________________________!





[...]





! FDI shocks to endowment capital

! CEC-7

Shock qo("capital","cea") = 48.08;

Shock qfe("capital","opp","cea") = 4.57; 

Shock qfe("capital","met","cea") = 37.13; 

Shock qfe("capital","mil","cea") = 79.32;    

Shock qfe("capital","ofp","cea") = 72.34;

Shock qfe("capital","mnfcs","cea") = 79.39;    

Shock qfe("capital","svces","cea") = 38.89;    





! FSU

Shock qo("capital","fsu") = 7.22;

Shock qfe("capital","opp","fsu") = 18.39; 

Shock qfe("capital","met","fsu") = 13.78; 

Shock qfe("capital","mil","fsu") = 15.69;    

Shock qfe("capital","ofp","fsu") = 17.29;

Shock qfe("capital","mnfcs","fsu") = 10.21;    

Shock qfe("capital","svces","fsu") = 4.21;    





! Technology transfer shocks





! CEC-7

Shock ao("opp","cea") = 0.457;    

Shock ao("met","cea") = 3.713;    

Shock ao("mil","cea") = 7.932;    

Shock ao("ofp","cea") = 7.234;    

Shock ao("mnfcs","cea") = 7.939;    

Shock ao("svces","cea") = 3.889;    

! FSUShock ao("opp","fsu") = 1.839;    

Shock ao("met","fsu") = 1.378;    

Shock ao("mil","fsu") = 1.569;    

Shock ao("ofp","fsu") = 1.729;    

Shock ao("mnfcs","fsu") = 1.021;    

Shock ao("svces","fsu") = 0.421;    





[...]    

!___________________________End of Command file.__________________


195





!_____________________________fdi_slo.cmf_______________________________!

! This GEMPACK command file simulates FDI in CEC-7 and FSU, 

!  with sluggish labor, low FDI-shocks, and no technology transfer

!_______________________________________________________________________!





[...]





! files

!

file gtapSETS = set3-03s.har;

file gtapPARM = par3-03s.dat;

file gtapDATA = dat3-03.har;

!

! The set and parameter files now define labor as a sluggish endowment





! FDI shocks to endowment capital





! CEC-7

Shock qo("capital","cea") = 5.78;

Shock qfe("capital","opp","cea") = 0.55; 

Shock qfe("capital","met","cea") = 4.47; 

Shock qfe("capital","mil","cea") = 9.54;    

Shock qfe("capital","ofp","cea") = 8.70;

Shock qfe("capital","svces","cea") = 4.68;    

Shock qfe("capital","mnfcs","cea") = 9.55;    





! FSU

Shock qo("capital","fsu") = 0.71;

Shock qfe("capital","opp","fsu") = 1.81; 

Shock qfe("capital","met","fsu") = 1.35; 

Shock qfe("capital","mil","fsu") = 1.54;    

Shock qfe("capital","ofp","fsu") = 1.70;

Shock qfe("capital","svces","fsu") = 0.41;    

Shock qfe("capital","mnfcs","fsu") = 1.00;    





[...]    

!___________________________End of Command file.__________________

NOTE: The command files for the other scenarios with sluggish labor, i.e. fdi_slt, fdi_sho, and fdi_sht, are exactly the same as for fdi_mlt, fdi_mho, and fdi_mht, respectively, except that different set and parameter files are used, which define labor as a sluggish endowment.


196

Appendix A-5.3 Selected Model Results for the High-shock Scenarios

Table A-5.3.1: Changes in output and total GDP due to FDI between 1992 and 1996 in the high-shock scenarios (in percent)

 

 

MO

MT

SO

ST

CEC-7 Wheat

6.6

3.8

3.9

2.7

 

Coarse grains

6.4

4.0

4.1

3.2

 

Non-grain crops

4.2

3.7

1.1

1.4

 

Livestock

6.3

6.2

4.3

5.0

 

Meat

6.1

10.4

5.2

9.9

 

Milk

10.3

17.0

11.4

19.6

 

Other food products

13.6

22.3

15.9

26.2

 

Manufactures

25.3

38.0

24.3

30.3

 

Services

14.8

18.8

12.9

21.3

 

Primary products

5.9

2.9

1.8

1.4

 

Value of total GDP

12.7

26.9

11.5

21.4

FSU Wheat

- 2.0

- 4.4

- 2.8

- 3.8

 

Coarse grains

- 0.3

- 1.3

- 1.0

- 1.6

 

Non-grain crops

1.2

1.1

0.8

0.9

 

Livestock

1.8

1.8

2.3

2.4

 

Meat

1.7

2.9

2.3

3.6

 

Milk

2.0

3.1

3.1

4.4

 

Other food products

2.9

4.3

4.4

5.9

 

Manufactures

2.0

2.3

2.4

2.7

 

Services

2.2

2.9

1.8

2.9

 

Primary products

9.8

11.4

11.4

13.4

 

Value of total GDP

5.3

7.8

6.8

8.8

Source: Own calculations.


197

Table A-5.3.2: Changes in average factor prices due to FDI between 1992 and 1996 in the high-shock scenarios (in percent)

 

 

MO

MT

SO

ST

CEC-7 Land

23.2

35.5

32.8

46.3

 

Labor

8.9

23.2

19.7

30.6

 

Capital

- 18.4

- 8.1

- 32.0

- 26.3

FSU Land

5.5

7.6

13.0

15.3

 

Labor

4.9

7.5

8.3

10.4

 

Capital

- 1.3

1.1

- 3.0

- 1.1

Source: Own calculations.

Table A-5.3.3: Changes in labor use due to FDI between 1992 and 1996 in the high-shock scenarios (in percent)

 

 

MO

MT

SO

ST

CEC-7 Wheat

9.0

5.1

3.8

2.7

 

Coarse grains

8.8

5.4

4.0

3.2

 

Non-grain crops

6.2

5.0

1.0

1.5

 

Livestock

8.6

7.9

4.2

5.0

 

Meat

- 21.8

- 21.2

- 18.0

- 17.0

 

Milk

- 35.6

- 38.0

- 22.3

- 22.9

 

Other food products

- 26.8

- 26.3

- 14.6

- 12.4

 

Manufactures

- 2.1

1.4

1.7

3.1

 

Services

1.4

0.7

0.1

- 0.6

 

Primary products

8.1

1.4

0.1

- 1.2

FSU Wheat

- 2.8

- 5.6

- 3.0

- 4.0

 

Coarse grains

- 1.0

- 2.2

- 1.3

- 1.8

 

Non-grain crops

0.6

0.5

0.5

0.6

 

Livestock

1.4

1.3

1.9

2.0

 

Meat

- 8.9

- 9.3

- 7.0

- 7.2

 

Milk

- 8.4

- 9.2

- 5.7

- 6.2

 

Other food products

- 8.6

- 9.3

- 5.2

- 5.6

 

Manufactures

- 2.2

- 3.3

- 1.5

- 1.7

 

Services

1.0

1.4

0.5

0.6

 

Primary products

- 3.3

- 4.4

1.4

1.2

Source: Own calculations.


Fußnoten:

<62>

These are Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia.

<63>

General surveys are given by e.g. Caves (1982), Helleiner (1989), Dunning (1994) and Meier (1995).

<64>

"Host countries" are the locations where foreign investment actually occurs, while "home countries" are the countries of origin of foreign capital.

<65>

Artisien et al. (1993) provide an overview and some country studies on FDI in transition economies. Welfens and Jasinski (1994) analyze the role of FDI in the process of privatization.

<66>

However, the same authors find that these effects are very difficult to quantify based on empirical observations. It is, for example, not clear whether FDI just causes a one-time rise in the level of local firms' productivity, or rather leads to a sustainable increase in the local rate of output growth.

<67>

This is true e.g. for food processing in Hungary ( Table 5.2 ).

<68>

This might, on the other hand, also imply investment restrictions in other sectors which are declared "sensitive", e.g. the military industry.

<69>

Once FDI has actually occurred, foreign firms may still try to avoid taxation through "transfer pricing" activities. This means they buy intermediate inputs via intra-firm trade with internal prices calculated as to minimize the overall tax burden between home and host countries.

<70>

This is referred to as "tariff jumping investment" (Andersson 1991, p.41).

<71>

See Lotze (1997) for the case of the Polish sugar industry.

<72>

Primary products here include forestry, fishing, minerals, oil, coal, and gas.

<73>

See Svetlicic et al. (1993) for an overview.

<74>

Appendix A-5.2 provides the command files for implementing the scenarios in the GEMPACK modeling software.

<75>

This is the standard option in the GTAP model.

<76>

The elasticity of transformation for land and labor is set equal to - 1 for all sectors. Moreover, the elasticities of substitution between primary factors have been reduced for the transition economies in all sectors by 50 percent compared to the standard parameters in the GTAP database.

<77>

See Table A-5.1.2 in Appendix A-5.1.

<78>

For example, overall productivity of the sugar sector in Western Europe is between 60 percent (United Kingdom) and 116 percent (France) higher than in Poland (F.O. Licht 1989).

<79>

Since it is not explicitly distinguished between foreign and local firms in the model, spillovers between these groups cannot be considered.

<80>

See Table A-5.3.1 in Appendix A-5.3.

<81>

See Table A-5.3.3 in Appendix A-5.3.

<82>

For an analysis of the interaction between FDI, trade policies, and imperfect competition in a partial equilibrium framework, see Lotze (1997).


[Titelseite] [Widmung] [Danksagung] [1] [2] [3] [4] [5] [6] [Abkürzungsverzeichnis] [Selbständigkeitserklärung]

© Die inhaltliche Zusammenstellung und Aufmachung dieser Publikation sowie die elektronische Verarbeitung sind urheberrechtlich geschützt. Jede Verwertung, die nicht ausdrücklich vom Urheberrechtsgesetz zugelassen ist, bedarf der vorherigen Zustimmung. Das gilt insbesondere für die Vervielfältigung, die Bearbeitung und Einspeicherung und Verarbeitung in elektronische Systeme.

DiML DTD Version 2.0
Zertifizierter Dokumentenserver
der Humboldt-Universität zu Berlin
HTML - Version erstellt am:
Wed Apr 26 13:12:53 2000