FDI trends and foreign penetration of manufacturing in SEECs and NMS

1
FDI trends and foreign penetration of
manufacturing in SEECs and NMS

• Gábor Hunya
• The Vienna Institute for International Economic
  Studies, wiiw
• hunya_at_wiiw.ac.at

2
Sources of information on FDI

• Balance of payments
• FDI inflow/outflow, stocks by form
• FDI by country and industry
• Incomes repatriation/reinvestment of home and
  host countries
• Financial reports of foreign investment
  enterprises employment, sales, value added,
  exports (wiiw-FIE database, wiiw, EUROSTAT)
• Company surveys, press reports in home and host
  countries (Locomonitor, etc.)
• In this presentation
• FDI inflow and stocks in NMS-8 and SEEC-9
• foreign investment enterprises in manufacturing
  industry of Hungary, Slovenia, Bulgaria, Croatia
  and Romania

3
FDI inflow, EUR million, 2000-2005
4
FDI inflow, EUR million, 2000-2005
5
FDI inflow, EUR million, 2000-2005, log.
6
Inward FDI stock per capita, EUR, 2000-2005
7
Inward FDI stock by economic activity, 2004,
8
Foreign Investment Enterprise (FIE) database
Economic units with at least 10 foreign equity
ownership Activities NACE 2 digit, codes 15 to
37. Years covered Bulgaria 1998-2003, Croatia
1998-2004, Romania 1998-2002 Indicators number
of companies, nominal or own capital, total
assets, foreign assets, output or sales, value
added, number of employees, annual average
monthly wage, revenues from exports, profits
before tax, investments.
9
Share of FIEs in manufacturing employment, sales
and exports,
10
Share of foreign investment enterprises in
manufacturing employment,
11
Share of FIEs in manufacturing employment 2003,
12
Share of FIEs in manufacturing sales 2003,
13
Conclusions

• In 2005 FDI inflows remain volatile in SEECs
  similarly to many NMS
• FDI increases to new high in NMS, declines
  slightly in SEECs
• Share of manufacturing in FDI stocks lower in
  SEECs than in NMS,
• exception Romania (2004)
• FIEs share increases in manufacturing
  employment, sales and exports (2000-2003/4)
• Manufacturing FIE penetration in manufacturing is
  highest in Hungary,
• catching up fast in Romania, also in Croatia,
  low Slovenia
• FIEs have higher labour productivity (2-3 times)
  and higher export propensity than DEs
• in SEECs just like in NMS, more than in OECD
  countries
• Manufacturing FIEs concentrate in export oriented
  industries like textile, clothing
• in medium-high and high-tech industries cars,
  telecoms equipment
• in capital intensive industries petroleum,
  metals
• FIEs in SEECs are in industries with lower
  technology, they are also
• less export-oriented than in NMS