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FDI in SEE countries

FDI in SEE countries. by Gábor Hunya hunya@wiiw.ac.at. Basic definitions. Concept: Macroeconomic category with micro-economic content International capital movement permanent equity relations and participation in the management Practice: IMF Balance of Payments Manual, Revision 5

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FDI in SEE countries

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  1. FDI in SEE countries by Gábor Hunya hunya@wiiw.ac.at

  2. Basic definitions • Concept: Macroeconomic category with micro-economic content • International capital movement permanent equity relations and participation in the management • Practice: IMF Balance of Payments Manual, Revision 5 • At least 10 per cent of the target firm's nominal capital in the form of: • ·           equity investment in cash, • ·           equity investment in kind, • ·           reinvested profits, • ·           loans from the parent company to the subsidiary • Flows in the capital account • Stocks in the international investment position

  3. Host country determinants and types of FDI • Types of FDI allowed by economic determinants: resource and strategic asset seeking FDI market seeking FDI: purchasing power efficiency seeking FDI: production cost • Policy framework: political and economic stability legal and regulatory environment privatization • Business facilitation: promotion, incentives, institutions

  4. FDI inward stock, EUR million

  5. FDI Inward Stock per GDP, %

  6. FDI inflow, EUR million

  7. UNCTAD ranking of countries

  8. Indicators of Competitiveness, 2002

  9. Share of foreign affiliates in manufacturing, %

  10. Share of FIEs in employment 2001-2002

  11. FDI prospects in SEECs • Support to transformation and growth • Intensifies with EU accession • Means of privatization and restructuring • Supports competitiveness and export-lead growth • Transfer of technology and skills; but little in Western Balkans • Western Balkans has high costs and high prices

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