Outward Foreign Direct Investment and Governments in Central and Eastern Europe: The Cases of the Russian Federation, Hungary and Slovenia
Journal of World Investment, Vol. 3, No. 2, pp. 267-287, April 2002
21 Pages Posted: 5 Apr 2007
The role of outward FDI in transition economies is generally less well known and less understood than that of inward FDI. This so not only because the latter is larger in volume but also because the links of the former with restructuring are less well established and explained. Outward FDI, however, is gaining importance over time, and there is a need to have a closer look at its evolution and its relationship with government policies. This article analyses the examples of three transition economies: the Russian Federation, Hungary and Slovenia, and concludes that the financial resource element of outward FDI is generally less important than its components linked to international integration and competitiveness. Although capital account liberalization will not stop capital outflows if the underlying causes are not addressed properly, it can ensure a smooth and transparent transition towards capital exports.
Keywords: outward FDI, capital outflows, inward FDI, economies in transition, Hungary, Russia, Slovenia
JEL Classification: F21, F23, O52, P26
Suggested Citation: Suggested Citation