Policies Towards the OFDI and IFDI in the European Union after the 2008+ Crisis

Abstract

Objective : The objective of this paper is to evaluate the (post)crisis FDI policies in Europe, taken the significant drop in international foreign direct investment (FDI) flows as observed in the aftermath of 2008+ crisis as well as the accompanying ideological shifts as to the role of the State in the economy. Research Design & Methods : By synthesising the available sources – critical literature review, evaluation of rankings and scoreboards and experts’ survey - this paper seeks to classify the EU member states according to their policies pursued towards outward and inward foreign direct investment (IFDI, OFDI) in the context of 2008+ crisis. Findings : A matrix with for possible combinations of FDI policy has been proposed. It distinguishes: an open model with “a double positive strategy”, closed with “a double negative strategy”, competitive with “a positive outward and negative inward strategy”, and a capital model with “a positive inward, negative outward strategy”. Obtained results point to the dominance of two opposite models where countries seem to apply combinations of rather friendly IFDI (or OFDI) and unfriendly OFDI (or IFDI) policies. Implications & Recommendations : Current scarcity of a proper metric of FDI policy has made it necessary to draw on some imperfect substitutes, hence findings must be treated with caution. Properly designed, reliable international database enabling crosscountry comparisons in terms of FDI policies would certainly improve the quality of future research. Contribution & Value Added : Presented research findings can be seen as a voice in the discussion on FDI policy in Europe, in particular on the issue of operationalisation of such policy.