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Regional Policy and FDI Location – an Overview of the Larger New EU Member States

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  • Gabor Hunya

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Summary The paper compares three countries (Hungary, Poland and Romania) in terms of the number of greenfield FDI projects and of GDP by NUTS-2 sub-country regions. We discuss whether the particular regions received a smaller or larger share of projects than their share in GDP. Then we outline the regional and investment policy tools applied in each of the countries, looking at their possible impact on the location choice of investors. The investigation reveals significant regional gaps in attracting new FDI projects and a dominance of the capital cities. Regional discrepancies between NUTS-2 regions in terms of per capita GDP have become marginally smaller in recent years but were mainly unrelated to the location of new foreign investments. State aid for large investments, industrial parks and special economic zones has been among the most powerful tools directing the location choice of new FDI projects.

Suggested Citation

  • Gabor Hunya, 2014. "Regional Policy and FDI Location – an Overview of the Larger New EU Member States," wiiw Research Reports 393, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:rpaper:rr:393
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    References listed on IDEAS

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    1. C. Bellak & M. Leibrecht & R. Stehrer, 2010. "The role of public policy in closing foreign direct investment gaps: an empirical analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(1), pages 19-46, February.
    2. Anna Wisniewski, 2005. "he impact of Foreign Direct Investment on regional development in Poland," IWE Working Papers 162, Institute for World Economics - Centre for Economic and Regional Studies.
    3. Andrea Gauselmann & Philipp Marek, 2011. "Regional Determinants of MNE's Location Choice in Transition Economies," WIFO Working Papers 412, WIFO.
    4. Agnieszka Chidlow & Stephen Young, 2008. "Regional Determinants of FDI Distribution in Poland," William Davidson Institute Working Papers Series wp943, William Davidson Institute at the University of Michigan.
    5. Christian BELLAK & Markus LEIBRECHT & Mario LIEBENSTEINER, 2010. "Attracting foreign direct investment: the public policy scope for South East European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 1, pages 37-53, December.
    6. Gabor Hunya & Monika Schwarzhappel, 2013. "Growth Engine Stutters," wiiw FDI Reports 2013-06, The Vienna Institute for International Economic Studies, wiiw.
    7. Gabor Hunya, 2011. "An Assessment of the Access by Romanian SMEs to Structural Funds," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 4, pages 19-49, December.
    8. Aniela Raluca Danciu & Vasile Alecsandru Strat, 2012. "The FDI profile in the Romanian manufacturing sector," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 4(2), pages 57-64, Decembre.
    9. Wakelin, Katharine & Girma, Sourafel, 2001. "Regional Underdevelopment: Is FDI the Solution? A Semiparametric Analysis," CEPR Discussion Papers 2995, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Gál, Zoltán, 2019. "Az FDI szerepe a gazdasági növekedés és a beruházások területi differenciálódásában Magyarországon [The foreign direct investment role in Hungarys economic growth and territorial differentiation of," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 653-686.
    2. Elina De Simone & Marcella D’Uva, 2017. "Social Support, Industrial Parks and FDI Location Choice Across Hungarian Counties," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(3), pages 1031-1045, September.
    3. David Bailey & Helena Lenihan & Alex De Ruyter, 2016. "A cautionary tale of two ‘tigers’: Industrial policy ‘lessons’ from Ireland and Hungary?," Local Economy, London South Bank University, vol. 31(8), pages 873-891, December.

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    More about this item

    Keywords

    FDI; industrial location; regional policy; FDI policy;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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