FDI patterns and trends in central and eastern Europe with particular regard to the new Member States

Abstract

This article examines foreign direct investment (FDI) in the European context and assesses the significance of relocation of production and workplaces from the west to the east. The first part of the article provides a statistical overview of FDI in central and eastern European countries (CEECs) for the last five years. Structural features of FDI flow and stock are presented and the trend of an increasing role for reinvested profits is examined. The second part focuses on the qualitative features of FDI and foreign trade. It provides evidence of the incidence of relocation, the growing role of intra-industrial trade, and the changing role of manufacturing in the economies of the EU-15 and the CEECs.