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Abstract:
Food industry FDI has favoured certain food processing sub-sectors over others and it has also been distributed rather unevenly in geographical terms both between countries and regionally within each country. As for the regional distribution, foreign investors have typically targeted locations with a relatively high density of consumers as opposed for instance to prioritising the proximity of agricultural raw materials. The capital city areas and their surrounding regions have attracted a much higher proportion of total food industry FDI than their contribution to agricultural and food processing output would warrant. FDI has contributed in many ways to the development of the regions and industries which have received capital inflows. There has been some levelling off in FDI between countries more recently, a trend driven by the tendency for multinational enterprises to shift their production capacity across national borders among their CEE subsidiaries in a search for greater economies of scale or cost savings. This realignment has helped certain branches of the food industry in some CEE countries perform better than others in competing for common EU food markets. Positive effects of the recent FDI inflows include rapid productivity improvements and enhancement of food export volumes.
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