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Outward FDI from Central and Eastern European Countries

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  • Kálmán Kalotay

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Abstract

In Central and Eastern Europe, outward foreign direct investment (FDI) has not yet become as a prominent factor in the region’s reintegration into the world economy as trade liberalisation used to be in the early 1990s or inward foreign direct investment is currently. In the terminology of the investment–development path, with the notable exception of the Russian Federation, the region is in stage 2, whereby inward flows are still growing faster than outward flows. This article argues that a combination of the latecomer status of the region’s transnational corporations and the transition shock can explain most of that laggard situation. It hypothesises that the enlargement of the European Union (EU) would give a major push to the outward foreign direct investment flows of Central and Eastern Europe (CEE), on condition that adequate government policies to promote those investments are put in place. The impact on the investment–development path, however, is uncertain, because accession to the EU is often accompanied by a surge in foreign direct investment inflows, too. Finally, the article also looks at the options available to deal with the specific problems of the Russian Federation in relation to capital flight, including ways of regularisation and potential return to the home economy. Copyright Springer 2004

Suggested Citation

  • Kálmán Kalotay, 2004. "Outward FDI from Central and Eastern European Countries," Economic Change and Restructuring, Springer, vol. 37(2), pages 141-172, June.
  • Handle: RePEc:kap:ecopln:v:37:y:2004:i:2:p:141-172
    DOI: 10.1007/s10644-004-7506-z
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    References listed on IDEAS

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    1. Unctad, 1996. "World Investment Report 1996," Foreign Trade Review, , vol. 31(3), pages 85-109, October.
    2. Urmas Varblane & Tonu Roolaht & Ele Reiljan & Rein Juriado, 2001. "Estonian Outward Foreign Direct Investments," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 9, Faculty of Economics and Business Administration, University of Tartu (Estonia).
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    Cited by:

    1. Soo Khoon Goh & Koi Nyen Wong, 2014. "Could Inward FDI Offset the Substitution Effect of Outward FDI on Domestic Investment? Evidence from Malaysia," Prague Economic Papers, University of Economics, Prague, vol. 2014(4), pages 413-425.
    2. Cantner, Uwe & Günther, Jutta & Hassan, Sohaib Shahzad & Jindra, Björn, 2013. "Outward FDI from the Central and Eastern European Transition Economies – A Discrete Choice Analysis of Location Choice within the European Union," MPRA Paper 51817, University Library of Munich, Germany, revised 04 Jun 2013.
    3. Björn Jindra & Sohaib S. Hassan & Jutta Günther & Uwe Cantner, 2015. "European Integration and Outward FDI from Central and Eastern Europe – Is There Any Evidence of Knowledge-seeking?," Journal of Common Market Studies, Wiley Blackwell, vol. 53(6), pages 1248-1267, November.
    4. Lect. Simona Gabriela Maşca Ph.D & Assist. Viorela Ligia Văidean Ph.D Student, 2010. "Outward Fdi And The Investment Development Path In Romania," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(15S), pages 27-38, November.
    5. Stoian, Carmen, 2013. "Extending Dunning's Investment Development Path: The role of home country institutional determinants in explaining outward foreign direct investment," International Business Review, Elsevier, vol. 22(3), pages 615-637.
    6. Marian Gorynia & Jan Nowak & Piotr Trapczynski & Radoslaw Wolniak, 2015. "Establishment Mode Choices of Emerging Multinationals: Evidence from Poland," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(2 (Summer), pages 101-124.
    7. repec:eee:rujoec:v:3:y:2017:i:4:p:445-474 is not listed on IDEAS
    8. Perez, M. Fabricio & Brada, Josef C. & Drabek, Zdenek, 2012. "Illicit money flows as motives for FDI," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 108-126.
    9. Malgorzata Szalucka, 2015. "Does Location Really Matter? The Influence of the FDI Location on Enterprise Competitiveness: The Evidence from Polish Enterprises," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(2 (Summer), pages 125-149.
    10. Harun Kaya, 2009. "Unfavorable Business Environment and Foreign Direct Investment Activities of Turkish Manufacturing Firms," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 3(1), pages 101-118.
    11. Damijan, Jože & Kostevc, Crt & Rojec, Matija, 2014. "Outward FDI and company performance in CEECs," Working Paper Series in Economics and Institutions of Innovation 381, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    12. Cantner, Uwe & Günther, Jutta & Hassan, Sohaib Shahzad & Jindra, Björn, 2013. "Outward FDI from Central and East European Transition Economies – A discrete choice analysis of location within the EU," MPRA Paper 51804, University Library of Munich, Germany, revised 12 Aug 2013.

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