A critical assessment of the relative success and failings of Central European countries to attract and sustain foreign direct investment

The purpose of this dissertation is to determine, firstly, what part foreign direct investment has played in the economic recovery of post-communist Central and Eastern European states in the last 15 years, and secondly, whether the countries in the region have successfully attracted and sustained this. The determinants of FDI for both transition countries and the investing companies are assessed, followed by specific case studies looking at where and how individual companies have invested, and why they have either remained in the market or moved production elsewhere. Before this can be done, though, an analysis of the situation in the countries in 1990 must be undertaken � only once this has been done can one understand the scale of the task the post-communist states faced. Increasingly, the transition countries are becoming more stable, and with this are developing comparative advantages. These will be explored, with focus turning to the role FDI has had in the Czech Republic and Hungary. In the top tier in terms of performance, both countries built successful and functional market economies, however using very different methods. The legacies of these have had a lasting effect on the structure of the economies, and the types of foreign investment they have attracted. Overall, the paper will show the varying effects different types of foreign investment has had, and is having, on the transition states. As will be demonstrated, the attitudes of companies inevitably determined the longevity of investment, and with it the relative success or failure of countries in attracting and sustaining foreign direct investment