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Foreign Direct Investment in Slovakia

Foreign Direct Investment in Slovakia. Theoretical Reflections on a Changing Investment Incentive Structure. Kytir Sandra Department of Sociology Lancaster University UK. Tendencies in the Slovak Incentive Structure. Broadening of the notion of investment incentives

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Foreign Direct Investment in Slovakia

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  1. Foreign Direct Investment in Slovakia Theoretical Reflections on a Changing Investment Incentive Structure Kytir Sandra Department of Sociology Lancaster University UK

  2. Tendencies in the Slovak Incentive Structure • Broadening of the notion of investment incentives • From an incentive structure to a steering structure

  3. Brief Overview of Slovakia‘s Relationship to FDI • Shift from Economic Nationalism to Economic Liberalism • Changes in the relationship between political and economic autonomy • FDI is recognised as a policy field • Subordination of economic policy to international competitiveness

  4. Tendencies in the Slovak Incentive Structure • Broadening of the notion of investment incentives • Impact of foreign direct investment on the restructuring of regional economies • Redrawing of boundaries between investment incentives and other economic policies • The notion of investment incentives has broadened to include, for example, what was formerly subsumed under regional or infrastructural development

  5. Reasons: necessary diversification of competitive strategies, external and internal constraints, financial aspects (e.g. cost-efficiency) • Consequence: increasing influence of foreign investors on regional development coinciding with increasing efforts to embed FDI in regional economies

  6. Tendencies in the Slovak Incentive Structure • Extent to which regional policy is being shaped by regions’ approach towards foreign direct investment • From an incentive structure to a steering structure • Initially, state aid was an incentive or ‘bonus’ to convince foreign companies to invest • More recently, eligibility criteria for investment incentives have been linked to regional and economic development objectives (e.g., the amount of state aid is tied to a wide range of criteria and conditions)

  7. Consequence: tendential shift from FDI as developmental strategy to FDI as part of a developmental strategy

  8. Concluding Remarks • These two tendencies are inter-related • Competitive strategies are by no means coherent and consistent over time; rather, they have an evolutionary trajectory, going through various stages

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