Direct Foreign Investment in the Central and Eastern European Countries in the Period of Political and Economical Destabilization

Abstract

Goal – the main research query of the article regards whether the tendencies and mobility in the sphere of the FDI inflow to the CCEEs changed, in the existing conditions of the political and economic instability. Therefore, the purpose of the article is to evaluate the changes in the FDI level, dynamics and structure in the CCEEs in the conditions of geopolitical uncertainty resulting from the outbreak of the war in Ukraine, in comparison with the tendencies in the previous years. Research methodology – the first part of the article contains the analysis of the overview of the literature on the FDI conditioning in the CCEEs (the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Slovakia and Slovenia) and the evaluation of the investment attractiveness in the light of the selected factors. The next part contains the analyses concerning the capital inflow in the form of FDI to the CCEEs which included the data regarding the FDI resources, the FDI recourses per capita, FDI inflow, including the number and value of greenfield investments. The analysed period covers the years 2012–2022. Score/results – when analysing the basic macroeconomic indicators characterising the economic conditions of CCEEs, it may be stated that those countries follow an economic development path where FDI has an important role. The inflow of foreign direct investment played a crucial role both in the transformation process of CCEEs’ economies and also influences their modernisation and development now. Originality/value – considerations and analyses conducted in the article allow to claim that geopolitical destabilisation affected the economies of the CCEEs, including the inflow of capital in the form of FDI, in two ways. On the one hand, it may be observed that those countries, as well as other countries in Europe, experienced deterioration of the economic conditions. Lower dynamics of the GDP growth and high inflation are typical problems of the analysed economies. However, despite that, the investment attractiveness of those countries remains high. The analysed economies constitute attractive locations for foreign investment, which is confirmed by the growing FDI inflow, the growing value of FDI per capita, or the growing value of greenfield projects.