FDI in SEE countries

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FDI in SEE countries

• by Gábor Hunya
• hunya_at_wiiw.ac.at

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Basic definitions

• Concept Macroeconomic category with
  micro-economic content
• International capital movement permanent equity
  relations and participation in the management
• Practice IMF Balance of Payments Manual,
  Revision 5
• At least 10 per cent of the target firm's nominal
  capital in the form of
•            equity investment in cash,
•            equity investment in kind,
•            reinvested profits,
•            loans from the parent company to the
  subsidiary
• Flows in the capital account
• Stocks in the international investment position

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Host country determinants and types of FDI

• Types of FDI allowed by economic determinants
• resource and strategic asset seeking FDI
• market seeking FDI purchasing power
• efficiency seeking FDI production cost
• Policy framework political and economic
  stability
• legal and regulatory environment
• privatization
• Business facilitation promotion, incentives,
  institutions

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FDI inward stock, EUR million
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FDI Inward Stock per GDP,
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FDI inflow, EUR million
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UNCTAD ranking of countries
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Indicators of Competitiveness, 2002
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Share of foreign affiliates in manufacturing,
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Share of FIEs in employment 2001-2002
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FDI prospects in SEECs

• Support to transformation and growth
• Intensifies with EU accession
• Means of privatization and restructuring
• Supports competitiveness and export-lead growth
• Transfer of technology and skills but little in
  Western Balkans
• Western Balkans has high costs and high prices