Foreign Direct Investment in Hungary: Industry and Its Spatial Effects

Abstract

Foreign direct investment (FDI) has played a relevant role in the economic transformation of postsocialist countries, among which Hungary was one of the most attractive targets for foreign investors. This paper examines the major characteristics of FDI and enterprises of foreign interest with particular regard to industry, always an important sector for foreign investors. The spatial effects of FDI on the Hungarian economy, especially on the industrial sector, are also discussed. The future of Hungarian industry and its spatial structure, respectively, depend to a large extent on foreign capital flows and on the decisions and strategies of transnational corporations. It is also obvious that this extreme dependence is a characteristic feature of not only Hungary and the Hungarian economy, but of other postsocialist countries as well.