I had just a few days back pointed to an article on struggles of Austrian economy. It said ironically the reason for Austrian decline was too much of outward looking. They had gone and expanded big time in Eastern European countries whose people were relatively skilled and just needed investments. Once money came in, they filled in the gaps and started doing better than Austrian counterparts.
However, things differed for Germany. They did not go overboard in East Europe:
Germany’s growth was not similarly affected, for three reasons. To begin with, after the fall of Communism, Austria reoriented its foreign direct investment almost exclusively to Eastern Europe, which accounted for nearly 90% of its FDI outflows. In Germany, just 4% of FDI moved to Eastern Europe in the 1990s, reaching 30% at the turn of the century. As a result, Austria became much more integrated with Eastern Europe.
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