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Strengths and weaknesses of the outward FDI paths of the Central European countries


  • Eric Rugraff


This article uses foreign direct investment (FDI) annual reports of central banks and annual reports of the largest firms to study the outward foreign direct investment (OFDI) of the Central European countries. Four countries - the Czech Republic, Hungary, Poland and Slovenia - are the source of the predominant part of the OFDI stock of the Central-Eastern European area. Since the beginning of the 2000s the OFDI of the Central European countries has increased sharply. A small number of large horizontal multinationals investing in the neighbouring countries account for the bulk of the OFDI flows and stock. We distinguish three different OFDI paths and analyse the strengths and weaknesses of each one: the Czech and Hungarian path is characterised by the pivotal role of the foreign-owned multinationals in the OFDI process. The Polish OFDI path differs from the Czech and Hungarian path by the central role played by the state-owned extractive and infrastructure companies in the Polish FDI abroad. In Slovenia, the OFDI path takes the form of investments by private indigenous-grown multinationals that have successfully set up subsidiaries in the neighbouring countries.

Suggested Citation

  • Eric Rugraff, 2010. "Strengths and weaknesses of the outward FDI paths of the Central European countries," Post-Communist Economies, Taylor & Francis Journals, vol. 22(1), pages 1-17.
  • Handle: RePEc:taf:pocoec:v:22:y:2010:i:1:p:1-17
    DOI: 10.1080/14631370903525561

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    References listed on IDEAS

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    Cited by:

    1. Gál, Zoltán, 2019. "Az FDI szerepe a gazdasági növekedés és a beruházások területi differenciálódásában Magyarországon [The foreign direct investment role in Hungarys economic growth and territorial differentiation of," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 653-686.
    2. Gorynia, Marian & Nowak, Jan & Trąpczyński, Piotr & Wolniak, Radosław, 2019. "Friend or Foe? On the role of institutional reforms in the investment development path of Central and East European economies," International Business Review, Elsevier, vol. 28(3), pages 575-587.
    3. Magdolna Sass & Jana Vlčková, 2019. "Just Look behind the Data! Czech and Hungarian Outward Foreign Direct Investment and Multinationals," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 69(supplemen), pages 73-105, December.
    4. 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.
    5. Curran, Louise & Zignago, Soledad, 2012. "EU enlargement and the evolution of European production networks," Research in International Business and Finance, Elsevier, vol. 26(2), pages 240-257.
    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. Poór, József, 2013. "Az emberierőforrás-gazdálkodás átalakulása a nemzetközi cégek leányvállalatainál Magyarországon és a kelet-európai régióban [Changes of HR function at local subsidiaries of foreign-owned firms in H," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 64-89.
    8. Morar Triandafil, Cristina & Poanta, Dorina, 2011. "Central and East European Corporate Finance: Between Commonality and Heterogeneity," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 132-161, September.
    9. Jaklič, Andreja & Obloj, Krzysztof & Svetličič, Marjan & Kronegger, Luka, 2020. "Evolution of Central and Eastern Europe related international business research," Journal of Business Research, Elsevier, vol. 108(C), pages 421-434.
    10. Andreff, Wladimir & Andreff, Madeleine, 2017. "Multinational companies from transition economies and their outward foreign direct investment," Russian Journal of Economics, Elsevier, vol. 3(4), pages 445-474.
    11. Magdolna Sass & Andrea Éltetõ & Katalin Antalóczy, 2014. "Outward FDI from Hungary: the Emergence of Hungarian Multinationals," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 2(3), pages 47-61.
    12. Piotr Trapczynski, 2016. "MNEs from Poland: A Review of Extant Research," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 14(3 (Fall)), pages 283-306.
    13. 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.

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