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Capital flows to eastern Europe and the former Soviet Union
The impact of capital flows into the region is of fundamental importance to
the economic transition. They are bringing new methods of organisation of
business, new technologies, and a powerful influence on the building of
financial, regulatory and other institutions. They help establish the
financial discipline which is crucial to the effective functioning of a market
economy. Thus their impact is far beyond the simple flows of resources. In
this paper, we examine some of the determinants and consequences of capital
flows into the region.
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