Foreign Direct Investment in World Economy: Flows, Motives, Impact

This paper analyses foreign direct investment (FDI), their impact and trends in the context of the world economy and then as a case study of the Czech Republic. The first chapter studies the theoretical foundations of FDI and impact on source and destination countries. The second chapter summarizes basic trends, territorial and sectoral structure and evolution of the legal framework. The third part is a case study where the Czech Republic is put into the context of FDI, followed by analysis of its impact on the balance of payment, employment and interaction with local companies. The main outcome of the paper is that FDI has had a positive influence on employment, but investment incentives have focused too much on unskilled labour, which will become uncompetitive relative to other countries. A big risk is also the burden on the balance of payments