Abstract
Transitions to market economies from former planned ones, along with their opening-up, have forced significant restructuring of research and development (R&D) systems. This paper, focusing on the Central European economies, analyzes the process of restructuring industrial technologies. The main conclusions reached are the following. That these economies have been successful in absorbing foreign technology is evidenced by the rapid expansion of their high-tech exports and the wide diffusion of information technology. The recently reduced levels of R&D in these economies are not significantly low in comparison to the other OECD economies after controlling for differences of economic fundamentals. While foreign direct investment might have a negative effect in the long-run on the level of R&D, these economies can bolster their levels at least until domestic firms build up an efficient corporate system. Finally, the efficiency of R&D in these economies in terms of patent counts is significantly low; suggesting that these R&D systems are far from being globally competitive.
