Competitiveness in the Food Industry: a CGE Modelling Approach to assess Foreign Direct Investment in Transition Countries

For transition countries, the food industry sector is a key industry in terms of output andemployment shares. As a competitive sector that receives substantial foreign directinvestments (FDI), it plays an important role as an element in the process of integration in theEuropean and world market. The GLOBE Computable General Equilibrium model is appliedto analyse scenarios of alternative development pathways of the food industry sector, takinginto account the impact of FDI in the European food industry. The scenario analyses of thisstudy identify that with an enhanced attraction of FDI in the food processing industries in theNew Member States (NMS) the integration of the agri-food sectors in the NMS into theSingle European Market will become even stronger.