Zoltan Gal (p), Magdolna Sass

Foreign direct investments are substantial in services in the Visegrad countries. In the article, we analyse the impact of FDI on the host economy in four selected service industries in two areas: export and employment. FDI in the four selected service industries differ in terms of their vertical or horizontal nature: in business services FDI is predominantly vertical, in financial services and telecommunications it is predominantly horizontal, while in computer-related service activities both types can be found. According to our results, the impact on the host economy differs in the four service industries: we found positive and significant impact on exports in vertical business services and in horizontal telecommunications services, and on employment in business services and to a lesser extent in financial services. The positive impact either diminished or disappeared during the crisis. The comparison of the four Visegrad countries demonstrates the heterogeneous intensity and significance of this impact indicating their different specialisations in the analysed services industries.

Anna Gladysheva (p), Tatiana Ratnikova

In the context of economic policy in developing countries the FDI is a traditional tool to upgrade the production and management technology and come into international markets. Moreover, the agglomeration effect of FDI plays a big role in domestic economy development in a host country according to theoretical and empirical studies.
The research question of this work is that foreign participation (foreign direct investment inflow) is not an exogenous fact, but may be explained by the current level of development and attractiveness of a host company or territory. Therefore we are going to determine the factors FDI activity in Russian food industry (the most popular among foreign investors and strategically important) companies.
We estimate several types of models to estimate the effect or regional determinants on foreign activity in Russian food industry companies.
The results may be used
• for policy measures to attract FDI to a particular region,
• for understanding general tendencies in foreign activity distribution among regions of Russia,
• for a correct modelling of the effects of foreign investment and ownership on companies and regions taking into account the endogeneity of these factors.
There are two main purposes of the research:
• Compare the effects of regional determinants on foreign participation on firm and regional levels,
• Show that multilevel modelling can help to take into account regional heterogeneity of Russian food industry companies.
Depending on the data available on foreign participation the following approaches are used:
• Modelling of the probability to have a foreign owner (share of foreign capital is more than 10%) of the company. We estimate a multilevel binary choice model on a firm-level taking into account moderating regional effects (by using variables aggregated on a regional level) and heterogeneity of companies from different regions (in terms of the scale of the effects).

• Modelling of the number of companies with foreign direct investment and of companies with foreign ownership in a region. We estimate a multilevel count-data model on a regional level.

After the estimation of regional effects on the probability to have FDI and on the number of companies with FDI in a region we compare the estimates on individual and regional levels.
The research is in progress.

Fabian Kreutzer (p)

Offshoring offers firms the chance to split up the production chain and focus on tasks they can perform relatively efficiently in-house. The international fragmentation of value chains promises productivity and efficiency gains that, for the individual offshoring firms, holds the prospect of expansion in market shares, higher sales, and higher profits (Amiti and Wie 2005, Driffield et al. 2008, Ito and Tanaka 2010). The underlying economic mechanism appears intuitive. Companies that offshore will usually relocate the least productive parts of their production processes in order to focus on their core competencies. This leads to a restructuring of production towards higher productivity tasks so that, over time, firms reach a higher productivity level. While many studies have analysed offshoring effects based on country samples, there are less studies published which focus on certain regions. This study focuses on an old industrial area, the Lower Niederrhein in Germany, located near the Dutch and Belgium border. This first analysis is the prequel for further regional studies in Germany. The sample is split up into three groups: firms with domestic relocation activities, firms with foreign relocation activities, and firms without any outsourcing activities. I offer different motives for offshoring and backshoring for these groups. In addition, I can show that the intensity of relocation matters for the offshoring success. This assumption is theoretically grounded, but lacks empirical support.
With the help of different matching models (Propensity Score Matching, Inverse Probability Matching, Doubly Robust Estimator) innovation and employment effects are analysed. Primary results indicate firms that relocate perform worse than the control group

Federica Maggi (p), Rico Maggi

Foreign direct investment (FDI) has become increasingly important in the last 15 years and worldwide FDI are growing at a significant rate. The aim of this analysis is to understand if the presence of FDI in a specific sector attracts FDI in close industries, allowing them to benefit from agglomeration economy. Presence of similar industry on the same area is, in fact, an opportunity for firms to get advantage from knowledge spillovers, higher collaboration, economy of scale and also a good solution for lowering transportation costs.
In particular, we consider if there is a spatial relationship in Switzerland, an open economy in the middle of Europe, which is supposed to be an attractive area for FDI, especially the horizontal ones. Previous research (Blonigen at al, 2004; Coughlin et al, 2000) focused their attention on spatial interconnections and they found out a positive correlation to a country and the FDI that neighboring countries receive. In this paper, instead, we take a general look at the potential interdependence of FDI across different sectors in a developed country.
Using a spatial econometric approach, we estimate the strength of any sectoral relationship between FDI in Switzerland, starting from 2000 until 2014. Input-output relations are used to define the spatial matrix, computing the economic distance that characterizes interactions between sectors: two sectors can be considered close if they either buy or sell goods from similar industries.
According to the initial estimates, the spatial coefficient indicates a positive sectoral relationship in FDI: the presence of FDI in one sector tends to attract FDI in similar industries; this is a good opportunity for firms to reach a good specialization index and, as consequence, a good competitive advantage.