Characterizing the Patterns of Inward and Emerging Outward FDI in Hungary

In terms of its size, Hungary has been a relatively open economy. This is indicated by high exports/GDP ratios that have prevailed since the 1970s. However, until the 1990s both inward and outward foreign direct investments (FDI) were negligible. The decade of the 1990s can be characterized by inward FDI, and in the 2000s fast-growing outward FDI can be observed. The impacts of inward FDI on Hungary and transition economies are widely dis-cussed in both comparative economics and international business literature. Outward FDI has attracted lesser attention, especially in Central and Eastern Europe so far. The political and economic situation of some countries in the region has been changed by EU membership. This chapter provides an overview on the inward and outward FDI of selected Central and Eastern European countries and focuses on Hungary. In the 1990s Hungary was a success story in attracting FDI. The description of the source countries and recipient branches will show that the inward FDI is concentrated. Emerging Hungarian outward FDI put Hungary ahead in the region in the 2000s. However, the values are small and volatile. Time series data is used to depict these trends. Recipient countries and source branches will be analysed. The shaping patterns will be described and evaluated in the light of international business and Hungarian literature on MNEs.