Foreign Direct Investment in Central and Eastern Europe

1. Front Matter

   Pages i-xviii

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2. Introduction: The Changing Patterns of FDI

   • Balázs Szent-Iványi

   Pages 1-22

3. Post-crisis Crossroads for FDI in CEE

   • Kálmán Kalotay

   Pages 23-49

4. Czech FDI Performance: Between Global Value Chains and Domestic Reforms

   • Tereza De Castro, Pavel Hnát

   Pages 51-75

5. Foreign Direct Investment in Slovakia: The Tatra Tiger Gone Tame?

   • Martin Grančay, Nóra Grančay

   Pages 77-98

6. Latecomers May Be Admitted: Foreign Direct Investment Between the CEE Countries

   • Magdolna Sass

   Pages 99-126

7. Upgrading and Value Capture in Global Value Chains in Hungary: More Complex than What the Smile Curve Suggests

   • Andrea Szalavetz

   Pages 127-150

8. Inequalities of Accumulation: The Case of Central and Eastern Europe

   • Annamaria Artner

   Pages 151-169

9. Multinational Banks: Protective Factors of Financial Stability in Central and Eastern Europe?

   • Gábor Kutasi

   Pages 171-192

10. Investment Promotion in the Visegrad Countries: A Comparative Analysis

    • Ágnes Tőrös, Ádám Mészáros, Ákos Dani

    Pages 193-217

11. Competitiveness and Investment Promotion in Bulgaria and Romania

    • Sorin Gabriel Anton

    Pages 219-240

12. Conclusions: Prospects for FDI-Led Development in a Post-crisis World

    • Balázs Szent-Iványi

    Pages 241-257

13. Back Matter

    Pages 259-266

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This book examines how foreign direct investment (FDI) inflows to Central and Eastern Europe have changed after the Great Recession. It argues that beyond their cyclical effects, the economic crisis and the changing competitiveness of Central and Eastern European countries have had structural impacts on FDI in the region. FDI has traditionally been viewed as the key driver of national development, but the apparent structural shift means that focusing on cheap labour as a competitive advantage is no longer a viable strategy for the countries in the region. The authors argue that these countries need to move beyond the narrative of upgrading (attracting FDI inflows with increasingly higher value added), and focus on ensuring greater value capture instead. A potential way for doing this is by developing the conditions in which innovative national companies can emerge, thrive and eventually develop into lead firms of global value chains. The book provides readers with a highly informativeaccount of the reasons why this shift is necessary, as well as diverse perspectives and extensive discussions on the dynamics and structural impacts of FDI in post-crisis Central and Eastern Europe.

• foreign direct investment
• financial crisis
• Eastern and Central Europe
• State multi-national relations
• Post-crisis economic dynamics

“This book sets out to describe and analyse the main developments in foreign direct investment (FDI), in terms of volume and structure … . For readers interested in CEE and the EU, this book can also provide valuable insights. The new trends it documents and analyses have not been reflected so far in appropriate policy responses. In this respect the volume provides policymakers with practical evidence and policy suggestions they would do well to consider and act upon.” (Liliana Pop, Europe-Asia Studies, Vol. 70 (7), 2018)

“This excellent volume is a well-structured and timely contribution to the literature on foreign direct investment and the post-socialist economies of Central and Eastern Europe. It contributes valuable evidence to support the growing calls to reconsider how FDI and development interact in an interdependent and globalized world. FDI policies need to be more dynamic, and evolve with changing internal and external circumstances.” (Rajneesh Narula, The John H. Dunning Chair in International Business, Professor of International Business and Strategy, Henley Business School, UK)

“The book presents an even-handed view of foreign direct investment (FDI), stressing its positive effects, but also pointing out that attracting FDI should not be seen as a substitute for a vibrant domestic business sector, otherwise dual economic structures emerge, and development becomes unbalanced. It is the aftermath of the global financial crisis that exposed both the risks and the benefits of FDI, and the book does a good job documenting it. It identifies both how FDI-related financial flows changed after the crisis, what was the strategy response of local affiliates, and where foreign ownership played a stabilising role post-crisis, in the banking sector in particular. Importantly, the book also accounts for the recent trend towards the adoption of “national capitalist” policies and identifies the associated risks of the focus on picking the winners instead of creating an environment for national champions to emerge. Ironically, these policies may replace imbalances related to the role of foreign firms with even more serious imbalances created by the focus on state-sponsored entrenched local players. Given the current political trends in Europe and elsewhere, the Central European lessons that are so well documented in this book acquire wider importance.” (Tomasz Mickiewicz, 50th Anniversary Professor in Economics, Aston University, Birmingham, UK)

“This collective volumetakes a fresh look at the role of FDI in globalizing and upgrading the economies of East-Central Europe, the new EU members. Offering critical theoretical perspectives, the authors provide a policy relevant analysis of the post-crisis period. While generally supportive of FDI-led modernization, they also call attention to the dangers of being caught in a low value capture trap, which may be exacerbated if industrial policies are statist and arbitrary. A must read for anyone seriously interested in new trends in foreign direct investment, in academia and policy-making alike.” (László Csaba, Member of the Hungarian Academy of Sciences and of Academia Europaea, London, UK)

• Aston Centre for Europe, Aston University, Birmingham, United Kingdom

  Balázs Szent-Iványi

Balázs Szent-Iványi is a lecturer in Politics and International Relations at Aston University, Birmingham, UK. He also holds an associate professor position at Corvinus University, Budapest, Hungary.

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