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Recognising three main channels of economic integration (labour migration, trade flows, and FDI), this paper focuses on the employment effects of FDI in Europe, addressing, in particular, concerns that EU firms will relocate jobs to low-wage countries in Central and Eastern Europe at the expense of jobs elsewhere in the European Union. European firm level data are used to document firm level differences in labour costs and productivity between high-wage and low-wage regions, thereby assessing the competitiveness of various regions. In addition, firm level data of over 1,000 European transnational corporations and their affiliates are used to analyse whether employment relocation between high-and low-wage regions occurs. The main finding is that employment relocation from west to east is not taking place, but there is evidence for employment relocation within high-wage European regions.

This article compares the differences in salary costs & in productivity between Belgium & Portugal, serving as an EU benchmark for respectively high & low salary states, & those in the three major emerging markets, Poland, Hungary, & the Czech Republic, based on information of individual businesses. The study revealed that between 1995 & 2000 the salary costs in Belgium were seven times higher than in the three emerging markets, & four times higher than in Portugal. Also, there is a positive correlation between high salary costs & high productivity. Furthermore, there is no reason to relocate manufacturing of certain industries from high to low salary member states since certain industries generate high salary costs anywhere. In conclusion, there are indications that the evolution of the salary costs in proportion to productivity in Portugal has a limited negative effect on employment in Belgium, whereas salary costs in the NMS have no significant impact. 5 Tables, 11 References. A. Michaux

This paper uses firm‐level panel data to investigate empirically the effects of foreign direct investment on the productivity performance of domestic firms in three emerging economies of Central and Eastern Europe: Bulgaria, Romania and Poland. To this end, a unique firm‐level panel dataset is used with detailed information on foreign ownership at the firm level. Two main questions are addressed in the present paper: (1) do foreign firms perform better than their domestic counterparts? (2) do foreign firms generate spillovers to domestic firms?The estimation technique in this paper takes potential endogeneity of ownership, spillovers and other factors into account by estimating a fixed effects model using instrumental variables in the general methods of moment technique for panel data.Only in Poland, do foreign firms perform better than firms without foreign participation. Moreover, for all three countries studied here, I find no evidence of positive spillovers to domestic firms, on average. In contrast, on average, there are negative spillovers to domestic firms in Bulgaria and Romania, while there are no spillovers to domestic firms in Poland. This suggests a negative competition effect that dominates a positive technology effect.JEL classification: D24, F14, O52, P31.

Turkey is the most controversial candidate for accession to an enlarged EU. This book takes a cross disciplinary approach to assess the extent to which it is satisfying the Copenhagen criteria.

This paper empirically evaluates the effects of antidumping measures on the exports of protected firms. While antidumping protection raises the domestic sales of the more 'traditional?non-exporting firms on the protected market with about 5%, it negatively affects the firm-level exports of similar products as the protected ones. Export sales of protected firms fall by almost 8% compared to a relevant control group of unprotected firms. The drop in firm-level exports more than doubles for firms that are global, i.e. firms with foreign affiliates. Measured at the product-level, extra-EU exports of goods protected by antidumping fall by 36% while exports to target countries fall by as much as 66% following protection. Protection also affects the extensive margin of exporters but to a lesser extent. Initial exporters face a marginally higher probability to stop exporting during protection compared to unprotected firms. Finally, we find that the productivity of exporters falls while that of non-exporters rises during antidumping protection. We offer a number of plausible explanations for our findings arising from the heterogeneous firm literature. We also discuss the importance of our findings for policy.

This paper uses EU firm-level panel data to estimate the effect of Antidumping (AD) protection on the productivity of EU domestic firms in import-competing industries. We find that firms with relatively low initial productivity - laggard firms - have productivity gains during AD protection, while firms with high initial productivity - frontier firms - experience productivity losses. While the productivity of the average firm is moderately improved during AD protection, productivity remains below that of firms never involved in AD cases, thus questioning the desirability of protection. Our empirical results are consistent with recent theoretical work supporting the view that trade policy can have a differential effect on firms depending on their initial productivity.