lnstitutional Models of Foreign Direct Investment Attracting. Comparative Aspects

Abstract

The paper examines the effectiveness of different institutional models of foreign direct investment (FDI) aitracting and the relationship between the institutional framework and the scale of FDI flows into countries being in the Process of catching up with developed economies. The experience of such countries as Ireland, the Czech Republic, Hungary and Poland is used for studying this problem. The results indicate that the most effective institutional framework supporting the inflow of FDI to a host country is to set up a quasi governmental agency promoting FDI. This agency should be ofa one-stop-shop character and endowed with appropriate authorization. The adopted institutional framework must be harmonized with the basic assumptions of the Policy towards foreign investors. The scale of FDI inflows into host countries depends only to a limited degree on institutional solutions. The character of Policy towards foreign investors and traditional location advantages seem to play a more important role.