Austria's foreign direct investment in Central and Eastern Europe. "supply based" or "market driven"?

Publication: Working/Discussion PaperWU Working Paper

Abstract

Since 1989 Austria's investment activities in Central and Eastern Europe has intensified. Investments are concentrated in adjacent countries. Geographical proximity and close historical and cultural ties have enabled even small and medium-sized Austrian enterprises to achieve a 'first mover advantage'. Investments have been performed to a large extent in industries that are typically not connected with outsourcing activities (trade, finance and insurance, construction). Market-driven factors and strategic considerations are the ultimate objective of these investments. Only a few sectors, in particular a so-called 'core' industrial sector (metal products, mechanical products, electrical and electronic equipment), indicate that low labour costs are of importance. Trade and sales data of the affiliates support the dominance of the local market. Whilst on average 66% of the affiliates output was sold locally this share was only 39% for the "core" industrial sector. This sector indicates particular patterns of relocation. Nevertheless, until now this part of Austria's FDI has only been of minor importance. (author's abstract)
Original languageEnglish
Place of PublicationVienna
PublisherInst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business
Publication statusPublished - 1998

Publication series

NameDepartment of Economics Working Paper Series
No.57

WU Working Paper Series

  • Department of Economics Working Paper Series

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