Automotive outward FDI from the Visegrad countries and Austria: Do indigenous companies invest abroad?
Austria, Czechia, Hungary, Poland, and Slovakia have a relatively substantial outward FDI stock in the automotive industry. This may be a sign of increased competitiveness of indigenous automotive companies, but can be the result of other factors as well. Outward FDI data are analysed in the paper and compared with FATS data and company level data, taking into account their different content. Based on this comparative analysis, we conclude, that – opposed to the case of Austria and to some extent Poland and later on Czechia – the overwhelming majority of outward FDI realised from the other Visegrad countries in the automotive industry is actually realised by local subsidiaries of large foreign automakers, participating in global value chains, while indigenous firms hardly expand abroad through FDI. Developments over time are also highlighted, leading to changes in the position of Czechia in that respect. We highlight that the Visegrad countries are used to different extent as intermediary countries for outward investments of foreign multinationals. The reasons most likely include, besides the most often mentioned tax optimisation motivation, organisational reasons related to global value chains. Thus domestic firms represent none or a minor share of automotive outward FDI. That is why outward FDI is not a direct indicator of the international competitiveness of domestic firms in the Visegrad countries.
Automotive industry, outward foreign direct investments, Visegrad countries, Austria, tax optimisation, global value chains.
Cite this paper
Sass, M., & Tabajdi, G. (2023). Automotive outward FDI from the Visegrad countries and Austria: Do indigenous companies invest abroad? In: 23rd International Joint Conference Central and Eastern Europe in the Changing Business Environment: Proceedings. Vydavateľstvo EKONÓM, Bratislava. pp. 225-235. https://doi.org/10.18267/pr.2023.kre.2490.18