Abstract
This study provides information on trends and role of the Czech outward foreign direct investment (OFDI) and evaluates the effects of the OFDI on parent companies. The analysis of trends is based on Czech National Bank data; the effects are evaluated through a unique set of data gathered through a sample survey. The stock of OFDI has grown slowly but steadily between 1993 and 2002. To date, about 80 per cent of OFDI is located in services and about 40 per cent in Central and East European countries (CEECs). The nature of OFDI in the EU is trade facilitating while the nature of OFDI in CEECs is tilted toward manufacturing. Much OFDI aims at avoiding a specific regulation in the home country or takes advantage of financial incentives in host countries. Our results indicate that OFDI is often related to parent company restructuring and is a precondition for maintenance and improvement of competitiveness.
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