How Do Western Companies Respond to the Opening of Central and East European Economies? Survey Evidence From a Small Open

In almost al1 post-communist countries widespread econornic reforms have taken place and an increasingly growing private sector has been established. Furthermore, increased trade flows between the West and tlie East emerged as a consequence of the opening up of Centra1 and Eastern Europe. Most of the transition countries are now starting to emerge from their deep recessions and show in fact high and positive growth of which many Western nations can only dream. Real GDP in Poland, Hungary and the Czech Republic for instance grew at respec-tively 7.0%, 1.5 % and 4.8 % in 1995 (EBRD (1996)). Mowever, at the Same time fear has grown in the industrialised countries that the in-creased globalisation of the economy and especially the increased competition from Centra1 and Eastern Europe wil1 harm domestic in-dustry and welfare1. Wood (1995) argues that the deteriorating situ-ation of unsltilled workers in developed countries is caused mainly b