The role of Central and Eastern Europe

The process of internationalization and production relocation experienced significant growth from 1980 onwards. The rise of globalization is due to several factors. One of these factors is the integration of Central and Eastern European and Asian countries into the global economy.

The integration of Central and Eastern European countries has led to new players and competitors in world trade. The population involved in world trade has almost quadrupled since the integration of these countries between 1975 and 2000. almost quadrupled between 1975 and 2000.

We will examine what factors influence the increase in internationalization and global production. And what role do the countries of Central and Eastern Europe play in this process?

Factors Affecting Advancing Internationalization and Global Production - Overview

Internationalization and relocation of production abroad have gone through various stages over the years. In previous decades, globalization was driven exclusively by exports. After 1980 and especially in the 1990s, other factors emerged that favored internationalization and global production.

First, the introduction of tools such as assembly lines enabled economies of scale to be realized. But the distribution of this production was limited to the home countries. After World War II, international trade began to increase. Territorial barriers were gradually reduced. This led to more and more foreign locations being used to distribute production.

This came as a result of several rounds of tariff reductions under the General Agreement on Tariffs and Trade. The progressive integration of the EU into a common market was also a factor that contributed to the abolition of territorial barriers. And of course to facilitate internationalization.

Technological progress is another factor that plays a major role in the process of internationalization. Improved technological capabilities and infrastructure have opened up opportunities for multinational companies in locations that were previously inaccessible. 

Transport, trade and communication are developing. As a result, companies are opening up new markets and expanding their activities worldwide. This creates a network between several companies. This opens the doors for direct investments. And they are a factor of enormous importance for globalization.

What role do the Central and Eastern European countries play in this process?

The role of Central and Eastern Europe as a factor of internationalization

Central and Eastern Europe plays a key role in internationalization and global production. This is the result of direct investment and offshoring in these countries. Due to their geographical location, the CEE-10 are particularly attractive for companies wanting to expand. The geographical location of these countries allows access to large European markets.

In addition, Central and Eastern European countries have a skilled workforce. And lower labor costs. This makes these countries particularly attractive for foreign investment and offshoring. The attractiveness of Central and Eastern European countries for foreign investments is also increasing due to the expansion of infrastructure. As well as through these countries' access to the EU internal market.

In 2004, German companies made direct investments in around 2,700 companies from the 10 CEE countries. These employed 757,000 people and achieved sales of almost 108 billion euros. Investments in the 10 CEE countries have grown disproportionately over the last decade. And as a result, the influence of these countries on the global market has also increased.


Investment activity in the ten CEE countries has increased significantly. And that makes the CEE countries an important player in the global economy. And an important factor for global production. Foreign investments from different regions play a key role in the growth of CEE countries.

The Central and Eastern European countries, especially Poland, Hungary, the Czech Republic and Slovakia, attract significant foreign investment from investors such as Germany, Austria and the USA. And that contributes to the overall growth of the region. And it has an impact on the global economy.

According to calculations, around 120,000 jobs were relocated from Germany to the CEE 10 countries by the end of 2004 in order to save costs.