Author ORCID Identifier
Document Type
Conference Paper
Disciplines
Business and Management.
Abstract
This paper reviews Foreign Direct Investment (FDI) as a strategy for economic growth in transition economies. It focuses on the economic growth strategy of the Czech Republic over the past decade and the balance that it has sought to achieve between FDI and the development of indigenous industry. This type of investment is generally associated with facilitation the transfer of newer, faster and productive technology to host countries. FDI and multinational companies brings along a more competitive environment that motivates local enterprises to perform to international standards set by the foreign firms as a survival strategy or motivate to create appropriate linkage with the multinational company and set integration in the branch.The paper also explores the case of Ireland and highlights the lessons that transition economies such as the Czech Republic can learn from its experiences regarding the promotion of FDI. These lessons include that a package of incentives is superior to a single incentive, host countries should adopt an enterprise–centred approach, sectoral direction requires project selectivity, and there are limitations to the local linkage potential in global production chains. A final warning is that FDI is not loyal to a host country and when it makes more economic sense to transfer operations to a lower cost / higher profit economy, then the FDI investor will move quickly and leave behind job losses and related difficulties.
Recommended Citation
Šebestová, J., & Cooney, T. M. FDI as an Economic Growth Strategy in the Czech Republic–Lessons from Ireland. In Liberec Economic Forum (p. 352).
Funder
This paper and research was supported by the Grant of Moravian‐Silesian Authority for mobility of young researchers Nr. VaV 19/2008 and the Grant of the Czech Grant Agency GAČR 402/07/0234.
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-Share Alike 4.0 International License.
Publication Details
Liberec Economic Forum (p.352)