Theoretical Context of Outward Foreign Direct Investment from Transition Economies

Before analyzing outward FDI by selected transition economies, it seems only appropriate to briefly review ¹ which and to what extent existing theoretical explanations can be applied to internationalization processes of transition economies and if these processes are different. Analysis of outward FDI must take into consideration a number of different theories, each of which can explain certain aspects of outward FDI. The second difficulty is that FDI theories have so far concentrated either on why firms invest abroad or on their impact on host countries. The least developed part of the FDI theory is its development implications, which is particularly true for the impact on the investing country. The latter has been high on the agenda of the research leading to this book.