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Austrian FDI by main Countries and Industries

Listed author(s):
  • Gabor Hunya


Austria is not among the top global investors, but it is an important regional player in Central and Southeast Europe. Will it keep that position, or will the regional player develop into a global player? This is the question for the future. Based on OeNB data we have found no indication for Austrian FDI expanding outside Europe. We only observe a shift of new FDI within the CEECs to the East and Southeast. As these are fast growing regions, they provide a good opportunity of internationalization for Austrian companies in the next future. Meanwhile, opportunities in even faster growing Asian countries may be missed. Looking at the relationship between FDI growth on one hand and labour productivity, capital productivity and profitability of subsidiaries on the other, we identified the profitability of subsidiaries as the factor most related to the growth of Austrian outward FDI. As a conclusion of the analysis in this paper, policy may have two tasks. One is to encourage companies that are not active internationally to invest abroad. But one can hardly expect that smaller companies go beyond the neighbouring countries. Therefore, another objective could be to support companies to grow beyond SME size because concentrated capital is necessary to enter more remote investment targets. While financial services and some manufacturing industries have internationally active larger companies, other industries may be hindered in their expansion by small firm size and scarcity of knowledge. Especially high-tech industries may need more venture capital and coaching.

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Paper provided by FIW in its series FIW Research Reports series with number I-015.

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Length: 39
Date of creation: Jun 2008
Handle: RePEc:wsr:ecbook:2008:i:i-015
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Order Information: Postal: FIW Project Office Austrian Institute of Economic Research Arsenal Objekt 20 A-1030 Vienna

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  1. Dirk Pilat & Agnès Cimper & Karsten Bjerring Olsen & Colin Webb, 2006. "The Changing Nature of Manufacturing in OECD Economies," OECD Science, Technology and Industry Working Papers 2006/9, OECD Publishing.
  2. Thierry Mayer & Gianmarco Ottaviano, 2008. "The Happy Few: The Internationalisation of European Firms," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 43(3), pages 135-148, May.
  3. Gabor Hunya & Monika Schwarzhappel, 2006. "Increased Significance of Repatriated and Reinvested Earnings," wiiw FDI Reports 2006-05, The Vienna Institute for International Economic Studies, wiiw.
  4. Kokko, Ari, 2006. "The Home Country Effects Of Fdi In Developed Economies," EIJS Working Paper Series 225, The European Institute of Japanese Studies.
  5. Robert E. Lipsey, 2002. "Home and Host Country Effects of FDI," NBER Working Papers 9293, National Bureau of Economic Research, Inc.
  6. Peter Havlik, 2005. "Unit Labour Costs in the New EU Member States," wiiw Statistical Reports 1, The Vienna Institute for International Economic Studies, wiiw.
  7. Rina Bhattacharya, 2007. "Austria's Deepening Economic Integration with Central and Eastern Europe," OECD Economics Department Working Papers 572, OECD Publishing.
  8. Ingo Geishecker & Gabor Hunya, 2005. "Employment Effects of Foreign Direct Investment in Central and Eastern Europe," wiiw Research Reports 321, The Vienna Institute for International Economic Studies, wiiw.
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