Foreign Direct Investment in the Czech Republic: A Challenge for Domestic Firms

The Czech Republic has been one of the primary recipients of foreign direct investment (FDI) among Central and Eastern European countries. Soon after transition, it attracted the attention of foreign investors based on sound economic fundamentals and the opportunities offered by early privatizations. Substantial foreign investment over a fifteen year period has profoundly affected the structure and performance of the economy. This country focus looks at the way in which foreign investment has influenced productivity and market dynamics, including intra and inter-industry spillovers, and the expansion of the economy as a whole.