Structure and objectives of Austria's foreign direct investment in the four adjacent Central and Eastern European countries Hungary, the Czech Republic, Slovenia and Slovakia

importance.

Table 3 shows three industries where market driven factors are of particular importance: finance and
insurance, trade and petroleum and chemicals.

Finance and insurance show this pattern quite well. Both domestic market factors are far above the mean
where all supply based factors (with the exception of the ‘know-how of the associated company’) are
below. Labour costs in particular are of least importance. As expected the export base factor is not of any
significance. Even for trade all market driven factors are above the mean and supply based factors (with
the exception of intermediate inputs) are below. Hence for these two industries in particular the
objectives of investment are rather obvious.

Petroleum and chemicals is the only sector without any specific feature. Nearly all motives (with the
exception of intermediate inputs) are rated by mean values. Hence even within this sector the dominance
of market driven motives is the only 'specific' pattern.

Even food and beverages show the prior importance of market driven factors: However for food and
beverages not only the domestic market is of importance but even ‘to create an export base’ scored high
(3.75). In addition this sector also shows considerable importance of intermediate inputs. The factor 'low
labour costs' scored second of all industries.

There are two other industries where non-labour supply based factors are of considerable importance:
both the construction sector and the non-metallic sector are very much dependent on procurement and
intermediate inputs.

Of particular interest is the so-called ‘core’-industrial sector. This sector considers low wage costs as
very important (3.46). It is the only sector which assesses low wage costs as the most important factor. It
seems to be the case that some kind of efficiency enhancing strategy is under way within this sector. All
market driven factors are rated favourably and close behind the wage cost factor. Other supply-based
factors are rather insignificant.

To summarise these features we must emphasise the overall importance of market driven factors. In
particular ‘market potential’ is of superior priority. This is especially the case for finance and insurance.
Only one industry, the so-called ‘core’ industrial sector, rated low wage costs rather high. However, if
one speaks about increasing ‘division of labour’ we have this sector in particular in mind! Hence this
sector is still of relevance. There are two sectors where other supply based motives play a role,
construction and non-metallic products. Both of them are dependent on intermediate products and
procurements above the average. Hence although the market driven factors dominate the overall
objectives of Austria’s FDI in the CEECs the patterns are very different by industries.

5. Sales and trade patterns of the Austrian affiliates

Finally we want to look at trade relations of Austrian affiliates. Even those figures indicate some very
specific features of Austrian investments. In particular it is of interest to which markets the affiliates are

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