Austrian Manufacturing MNEs: Long Term Perspectives

This article assesses the last 100 years of Austrian FDI. Before 1914 Austrian firms rarely engaged in FDI, mainly since the large home market had a high growth potential and since Austrian firms - although among the largest domestically - were smaller than their international competitors, less diversified and less vertically integrated, and hence their growth was based domestically and internally oriented. Despite the 'automatic' increase of FDI through the new borders in the early inter-war period, the loss of former markets, the crisis of 1929 and finally the Anschluss affected Austrian FDI negatively. Even in the post-Second World War period Austrian FDI remained subdued, mainly for structural factors and a favourable exporting environment. Only in the years preceding Austria's succession to the European Union in 1995 did FDI increase heavily, and Austrian firms became extensively involved in multinational activities.