foreign direct investment in slovakia theoretical reflections on a changing investment incentive...
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Foreign Direct Investment in Slovakia
Theoretical Reflections on a Changing Investment Incentive Structure
Kytir SandraDepartment of SociologyLancaster UniversityUK
Tendencies in the Slovak Incentive Structure
(1) Broadening of the notion of investment incentives
(2) From an incentive structure to a steering structure
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
Tendencies in the Slovak Incentive Structure
(1) Broadening of the notion of investment incentives
(2) 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
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
Tendencies in the Slovak Incentive Structure(1) Extent to which regional policy is being
shaped by regions’ approach towards foreign direct investment
(2) 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)
Consequence: tendential shift from FDI as developmental strategy to FDI as part of a developmental strategy
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