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Regional Determinants of German FDI in the Czech Republic - Evidence from a gravity model approach

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  • Schäffler, Johannes
  • Hecht, Veronika
  • Moritz, Michael

Abstract

On the basis of a unique dataset the regional distribution of German multinationals and their Czech affiliates is analysed for both countries. The investigation covers market size and agglomeration features, distance issues, and labour market characteristics. Apart from the vital role of large markets and a low transport distance there are further crucial findings regarding joint foreign direct investment (FDI) projects that can be revealed from a home-host country perspective: the strong position of the common border region, the non-relevance of a relatively high wage gap between the site of the headquarters and the location of the affiliate in coincidence with the great importance of the availability of high-skilled employees in the target country, and differences in the significance of sectoral employment shares.

Suggested Citation

  • Schäffler, Johannes & Hecht, Veronika & Moritz, Michael, 2015. "Regional Determinants of German FDI in the Czech Republic - Evidence from a gravity model approach," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112891, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112891
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    Cited by:

    1. Blien Uwe & Möller Joachim & Hong Van Phan thi & Brunow Stephan, 2016. "Long-Lasting Labour Market Consequences of German Unification," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 181-216, March.
    2. Michael Moritz & Veronika Hecht & Patricia Noska & Johannes Schaffler, 2020. "Types of FDI and Determinants of Affiliate Size: the Classification Makes the Difference," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 70(4), pages 312-331, October.
    3. repec:wsr:wpaper:y:2015:i:159 is not listed on IDEAS
    4. Schäffler, Johannes, 2016. "German Direct Investments in the Czech Republic – Employment Effects on German Multinational Enterprises," VfS Annual Conference 2016 (Augsburg): Demographic Change 145526, Verein für Socialpolitik / German Economic Association.
    5. Hecht, Veronika, 2015. "Location choice of German multinationals in the Czech Republic : the importance of agglomeration economies," IAB-Discussion Paper 201519, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Grzegorz Tchorek, 2016. "Foreign Direct Investment and Investment Development Path. The Case of Visegrad Countries (Bezposrednie Inwestycje Zagraniczne a Inwestycyjna Sciezka Rozwoju. Przypadek krajow grupy Wyszehradzkiej)," Research Reports, University of Warsaw, Faculty of Management, vol. 2(22), pages 201-212.

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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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