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Attracting and hosting foreign direct investment in digital transformation time. The case of post-transition economies

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  • Barbara Jankowska
  • Marta Götz

Abstract

This research touches upon the challenges related to attracting and retaining foreign direct investment (FDI) in times of digital transformation. Foreign direct investment (FDI) has been crucial for post-transition dependent market economies (DMEs), and was critical during the transformation processes. This study takes the perspective of the host economies, and in particular, the (post) transition V4 countries. The focus of this research is on the antecedents of investment-attractive locations in the Industry 4.0 era and the factors that have determined this attractiveness during the digital transformation. This paper is based on a critical literature review and in-depth expert interviews. The authors put forward three research proposals that stipulate the necessity of assuring absorption capabilities, embeddedness and upgrading, the importance of state intervention and incentives, the need for new regulations, and a digital ecosystem. The study indicates that in the realm of Industry 4.0, firms investing abroad need to look for locations rich in knowledge. Knowledge pools embedded in a particular location play the most important role in luring foreign investors.

Suggested Citation

  • Barbara Jankowska & Marta Götz, 2024. "Attracting and hosting foreign direct investment in digital transformation time. The case of post-transition economies," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 2, pages 119-137.
    • Handle: RePEc:aoq:ekonom:y:2024:i:2:p:119-137
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    References listed on IDEAS

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    1. Marta Gancarczyk & Joanna Bohatkiewicz, 2018. "Research Streams in Cluster Upgrading. A Literature Review," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 4(4), pages 17-42.
    2. Carlo Pietrobelli & Roberta Rabellotti & Ari Van Assche, 2021. "Making sense of global value chain-oriented policies: The trifecta of tasks, linkages, and firms," Journal of International Business Policy, Palgrave Macmillan, vol. 4(3), pages 327-346, September.
    3. Nicole Coviello & Liena Kano & Peter W Liesch, 2017. "Adapting the Uppsala model to a modern world: Macro-context and microfoundations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(9), pages 1151-1164, December.
    4. Butollo, Florian, 2021. "Digitalization and the geographies of production: Towards reshoring or global fragmentation?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 25(2), pages 259-278.
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    More about this item

    Keywords

    foreign direct investment (FDI); Industry 4.0; digital transformation; post-transition economy;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy

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