CATCHING-UP AND INTEGRATION IN NEW AND FUTURE EU MEMBER STATES THROUGH FDI

Abstract

The round of new membership had strong impact on the functioning of the European economy, both in terms of regulation, distribution of resources, and place of economic and regional developpment, catching up policies (converging policies). This goes along with an important flow of foreign capital pouring in the region where the rate of domestic accumulation is still very low and would never match investment requirements to develop a strong industrial base. Firstly, this raises the question of the development of “a capitalist economy without capitalists”. Secondly, it highlights the fact that industrial recovery and economic growth are fuelled by foreign investments in the region In this contribution, our aim is to highlight the transformation of these economies with their linkage through their new specialization, control to EU-15 economies through the strong presence of Western Multinational Corporation (MNC).