European Integration and Outward FDI from Central and Eastern Europe – Is There Any Evidence of Knowledge‐seeking?

Abstract

The European Union (EU) Member States in central and eastern Europe (CEE) witnessed a surge in outward foreign direct investment (OFDI) between 2000 and the start of the global financial crisis. This article investigates whether the European integration process altered the relative importance of host country location factors. In particular, we investigate to what extent knowledge‐seeking is a relevant investment motive, which has been documented as a key determinant for OFDI from other emerging economies. We apply a discrete choice approach to model foreign location choice of firms from CEE countries (CEECs) within the EU 27 (1996–2010). We find that the EU integration process is related with increasing importance of market access and less emphasis on labour cost advantages. We find heterogeneity in the valuation of foreign knowledge‐related assets. The location probability within the EU15 is positively associated with knowledge‐seeking. It also plays a role for technology‐intensive industries and larger firms.

An explanation for the Chinese interest in investing in the new EU Member States. A fixed effects panel data analysis

“…Therefore, investments in riskier locations are not unusual. The internationalization process of companies from emerging markets is different than in other countries (Jindra et al, 2015).…”

Just Look behind the Data! Czech and Hungarian Outward Foreign Direct Investment and Multinationals

“…Also, Stoian (2013) pointed out the differences between post-communist and emerging multinationals. Jindra et al (2015) showed the changes in the location of outward FDI from the CEE after their accession to the EU, but underlined that the main motivations of the CEE multinationals remained market-seeking, with some increased importance of efficiency-seeking, and still negligible knowledge-seeking.…”

Introduction to the Special Issue on the Internationalisation of Central and Eastern European firms

“…Pull factors, i.e. motivations include mainly market-seeking (Gorynia et al 2015), and there does not seem to be a change Acta Oeconomica 69 (2019) towards strategic asset seeking aims over time (Jindra et al 2015). In many areas, CEE multinationals seem to differ from both their developed and emerging country counterparts (Svetličič 2004), though this difference seem to whither over time (Sass 2018).…”