Transborder investment : corporate strategies and regional development in Eastern Europe

Currently we are witnessing the disappearance of many man-made borders and an increased international cooperation in the European Union. At the same time, the former communist countries are going through a painful process of economic transformation. Whether these developments lead to an open society to the benefit of all actors in all regions, remains to be seen. This paper addresses the issue of transborder investment in Eastern Europe by Western companies. The paper contributes first, to a conceptual discussion on borders and barriers, and the influence of borders and barriers on regional development (Section 2). Furthermore, based upon a blend of applied studies, the paper explores empirically transborder investment in Eastern Europe (Section 3). Particular attention will be given to barriers to this investment (Section 4). The paper proceeds with a discussion of factors that cause a differentiation in regional development potentials in Eastern Europe, among others a different attractiveness for foreign direct investment (Section 5). This differentiation will be one of the ingredients in the design of scenarios for future regional development in Eastern Europe in the concluding section.