The change of Central and Eastern Europe (CEE) countries from centrally planned to market economy resulted in increasing flows of foreign direct investment (FDI) to these transition countries. During the transition, CEE went through radical economic changes which had been largely induced by foreign capital. Foreign multinationals realised significant investment projects in this region and established their own production networks. Investors, mainly from EU-15 countries, were attracted by relatively low unit labour costs, market size, openness to trade, and proximity. The first phase of inward Asian FDI came right after the transition: Japanese and Korean companies indicated their willingness of investing in Hungary already before the fall of the iron curtain. Their investments took place during the first years of the democratic transition. (…)
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