ABSTRACT
Foreign direct investment (FDI) is a part of broader activities bringing internationalization and economic integration of businesses worldwide. Theories and concepts explaining FDI phenomenon have started to appear, develop, be adjusted, refined and modernized since 1960s. There are certain paradigms that can be used in studying, analyzing, developing, implementing and improving FDI policies in both macroeconomic and microeconomic aspects. Transition Central and Eastern Europe (CEE) countries have adopted different approaches towards the creation and implementation of FDI policies and strategies. The monopolistic competition and market imperfection theory of FDI can be useful for the host countries and companies in terms of evaluating the investing company's advantages, corporate assets and capabilities, as well as their suitability for application in the context of CEE. The network theory offers opportunities for in-depth processual analysis of FDI relationships in CEE. The chapter also presents an overview of the key concepts discussed in this book.
