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



shares to the EU and even intra-firm trade deficits by parent firms. It is this sector in particular
where some harmful impacts on the domestic economy may occur. Nevertheless, until now this
part of FDI has only been of minor importance. At the end of 1995 just 10.5% of total FDI had
been allocated to this sector. The bulk of Austria’s FDI in the CEECs is predominantly market
driven, produced to a very large extent for local markets, encourages thereby additional
‘associated’ exports and displays intra-firm trade surpluses by the Austrian parent firms. Hence it
is very likely that these investments have brought positive net effects on Austria’s economic
performance.

* I am grateful to the Division of ’International Balance of Payments’ at the Austrian National Bank for
assistance with the data, and to the 'Jubilaumsfonds' at the Austrian National Bank for financial support
under grant 6370. The author takes sole responsibility for the use and interpretation of the data.

References:

Agarwal, Jamuna P. (1996); Does Foreign Direct Investment Contribute to Unemployment in Home
Countries? - An Empirical Survey, Kiel WorkingPaper No.765, Kiel

Alter, Rolf (1995); Foreign Direct Investment, Trade and Employment - Overview on Analytical and
Economic Policy Issues, in: OECD (1995); Foreign Direct Investment, Trade and Employment, Paris,
p.7-16

Altzinger, Wilfried (1997a); Gewinner und Verlierer - Die Auswirkungen des Osthandels auf den
Osterreichischen Arbeitsmarkt, in: Beirat für gesellschafts-, wirtschafts- und umweltpolitische
Alternativen; Wege zu einem anderen Europa, Papyrossa Verlag, S. 168-97

Altzinger, Wilfried (1997b); Scope and Structure of Austria's Foreign Direct Investment in the CEECs,
Background Paper, presented at the PHARE Conference on 'Integration and Transition in Europe',
Budapest, September 11-14.

Altzinger, Wilfried (1998); Austria's Foreign Direct Investment in Central and Eastern Europe: 'Supply
Based' or 'Market Driven' ?, Working paper no. 57, Vienna University of Economics and Business
Administration, Department of Economics.

Altzinger, Wilfried/Maier, Gunther/ Fidrmuc, Jarko (1998); Crossborder Development in the Vienna-
Bratislawa-Region: A Review; in: Graute, Ulrich (ed.); Sustainable Development for Central and Eastern
Europe - Spatial Development in the European Context, Springer-Verlag, Wien-Berlin-New York, pp.89-
114

Austrian National Bank (1997); Austrian Outward and Inward Direct Investment at the End of 1995,
Supplement to 'Focus on Austria' 3/1997.

Baldwin, Richard (1994); The Effects of Trade and Foreign Direct Investment on Employment and
Relative Wages, in: OECD Economic Studies, No.23, Winter, pp.7-54

Beer, et al., (1998); Das Investitionsengagement Osterreichischer Unternehmen in Mittel- und Osteuropa
seit 1989 - elf Fallbeispiele, unpublished.

23



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