important (3), and very important (4). The responses to this questions are shown in Table 3. Only those
industries are presented which are the most important ones for Austria’s FDI in the CEECs. In addition to
these six industries a further category was included which we will call the ’core’ industry sector. This
group consists of the following industries: metal products, mechanical products, electrical and electronic
equipment and motor vehicles. Together these seven sub-categories represented 78.3% of Austrian FDI-
stock in the CEECs at the end of 1995 (see Table 2).
Due to our specific interest we have grouped the responses into two different groups. The first one can be
summarised as "market driven" factors and consists of the following factors: ’market potential’, ’customer
proximity’, ’to create an export base’. The second group we will call "supply based driven". This category
consists of the following factors: ’low wage costs’, ’to gain access to intermediate products’, ’to gain
access to procurement’, ’human capital’ and ’access to local technology1’.
The first column in Table 3 shows the number of answers. As indicated above only 147 firms of the total
sample have invested in the CEECs. Due to the fact that several respondents only replied to certain
statements the number of answers ranged between 109 and 137. However, there was not one sub-
category with fewer than five respondents.
Table 3 also shows the deviations from the mean by each industry. It is necessary to analyse both the
absolute importance as well as the relative importance of a factor. The ranking shows the importance of
all factors (first row in Table 3). The relative importance of a factor can be shown by the deviation from
the mean. For example, for non-metallic products the motive ’market potential’ is 0.1 below the mean.
Nevertheless this factor shows the highest mean of all factors (3.50). Hence this factor was the most
important one for an investment decision in non-metallic products although this factor rated higher in
most of the other industries.
Moreover the factors of FDI have been ordered by their importance. Additionally the industry sub-groups
have been classified by the highest rated factor (’market potential’). This ranking leads automatically to
such a sub-division of the factors in which we are interested! The three factors which are rated highest
are all market-driven factors whilst the remaining five factors which are all supply-based factors.
As can be seen the factor ’market potential’ yields by far the highest mean of 3.60 followed in second
place by ’customer proximity’ possessing a mean of 3.27. In third place is the factor ’export base’ with a
mean of 3.25. Hence all three factors with the highest ranking are ’market driven’ factors although the last
one indicates some very specific strategy which is very much different from the two other factors. This
issue in particular will be discussed in section 5.
The factor ’low wage costs’ with a mean of 2.91 is only ranged fourth. However for some industries this
factor is of importance (’core’ industrial sector, food and beverages, non-metallic products). Even the
other supply based driven factors such as ’human capital’ (2.43), ’to gain access to intermediate products’
(2.12) and ’to gain access to procurement’ (2.05) are all rated rather low. The lowest rating was given to
the factor ’know-how of associated company’ (1.78). These results testify rather clearly the dominance of
market-driven factors. However, different industries show different strategies with different
repercussions on domestic markets. Yet such a structural breakdown seems to be of considerable
16