Strengths and weaknesses of the outward FDI paths of the Central European countries

This article uses foreign direct investment (FDI) annual reports of central banks and annual reports of the largest firms to study the outward foreign direct investment (OFDI) of the Central European countries. Four countries - the Czech Republic, Hungary, Poland and Slovenia - are the source of the predominant part of the OFDI stock of the Central-Eastern European area. Since the beginning of the 2000s the OFDI of the Central European countries has increased sharply. A small number of large horizontal multinationals investing in the neighbouring countries account for the bulk of the OFDI flows and stock. We distinguish three different OFDI paths and analyse the strengths and weaknesses of each one: the Czech and Hungarian path is characterised by the pivotal role of the foreign-owned multinationals in the OFDI process. The Polish OFDI path differs from the Czech and Hungarian path by the central role played by the state-owned extractive and infrastructure companies in the Polish FDI abroad. In Slovenia, the OFDI path takes the form of investments by private indigenous-grown multinationals that have successfully set up subsidiaries in the neighbouring countries.