Mukodotoke - Valsagban? [Foreign Direct Investment - in Crisis?]
Közgazdasági Szemle, vol. 50, No. 1, pp. 35-55, January 2003
21 Pages Posted: 31 Jan 2006 Last revised: 13 Mar 2009
The strong worldwide contraction of foreign direct investment flows over the last two years is a symptom of short-term recession rather than a full-fledged crisis. Nevertheless, this recession is sharpening the international competition for foreign direct investment. Countries are applying increasingly sophisticated tools to attract investment projects. In this respect, Hungary is currently losing steam compared with other countries. On the one hand, its historical lead - based on first-mover advantages, privatization strategies and incentives - is eroding. On the other, there is pressure to change investment-promotion procedures in the context of European Union enlargement. Picking up steam again is not easy, but it can be done through a 'third-generation' investment-promotion policy that focuses on attracting higher value-added activities such as corporate-service functions. The future success of investment promotion will also require social consensus on the usefulness and benefits of foreign direct investment inflows.
Note: Downloadable document is in Hungarian.
Keywords: foreign direct investment, Hungary, investment promotion, European Union
JEL Classification: F21, F23, P26
Suggested Citation: Suggested Citation