Finally, it is the construction sector that plays a strong position in Austria’s outward FDI in the CEECs.
These activities are mainly as a result of the strong built-up requirements of the transformation countries
that could mostly not be satisfied by their own construction industries. As several case studies indicate
most of this investment was a complementary investment to the Austrian home based construction
industry (BEER, et al., 1998).
In absolute numbers by far the largest share of Austria’s FDI in the CEECs has been invested in Hungary.
In 1995 the four adjacent countries to Austria (Hungary, the Czech Republic, Slovenia and Slovakia)
accounted for 91.1% of Austria’s overall FDI in the CEECs. This regional pattern emphasises the
importance of geographical proximity which is entirely in accordance with the theoretical considerations
of Dunning (1994).
The sectoral patterns of the four CEECs listed in Table 2 are rather different. In Slovenia 31% of
Austria's FDI was invested in the trading sector and another 22% in the petroleum industry. In Slovenia it
is particular the petroleum distribution sector where Austria's oil refinery has heavily invested. This is a
typical example of complementary investment. Additionally it is finance and insurance where Austrian
firms invested quite strongly.
Both countries, Slovakia and the Czech Republic, show strong investments in the non-manufacturing
sector. However, the patterns within this sector are different. Within Slovakia it is the trading sector and
finance and insurance where Austrian investments are concentrated. The significant operations in finance
and insurance are a consequence of Austria's long-lasting economic co-operation even before 1989.
However, these operations intensified after the opening of the Eastern European economies and seem to
be developing rather well. It is a typical example where Austrian firms could extract favourably some
specific FMAs. However, it should be stressed that Austria's strong activities in the finance and insurance
sector are clouded to some extent: Ironically it is especially Slovakia where the European Union testified
strong market access restrictions for the financial sector (EUROPEAN COMMISSION, 1997).
This brief outline of the regional and sectoral patterns of Austria’s FDI in the CEECs shows three
important issues: The importance of geographical proximity, the significance of investments in the non-
manufacturing sectors and a significant activity of SMEs in this process of internationalisation due to
relatively low financial requirements. Consequently, the subsequently analysis on motives and trade
patterns will focus on those six sectors with show the strongest FDI activities (trade, construction,
finance and insurance, petroleum and chemicals, food and beverages, non-metallic products).
4. Motives for Austria’s FDI in the CEECs
To discuss the motives of FDI of Austrian enterprises we can rely on the results of a questionnaire which
was conducted in the summer of 1997 by almost 1700 Austrian enterprises1. A total of 279 firms (16.8%)
returned completed questionnaires. Out of these 279 firms 52.7% (147 firms) have invested in the
CEECs. Only the answers of these firms will be analysed in this section.
Concerning the motives the following question has been offered: "Which factors have been the most
important ones for your initial investment decision?" The question was of a close-ended variety where
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