Publisher's Synopsis
This book is the outcome of the author's four year inquiry into the determinants of and the role that foreign direct investment (FDI) plays in economic development and systemic transformation in Hungary and China during 1978?1992. It offers enormous insights which are essential for the academic and business communities. After reviewing FDI?s policies, pattern and trends, econometric models are used to analyze what factors best explain FDI inflows into both Hungary and China. The size of host markets, political stability and cheap labour are found to be important. It further tests the economic consequences of FDI on economic development and transformation in Hungary and China. Though there is a big difference between these two countries, the role of foreign capital in Hungary and China has grown rapidly, and is positively correlated with economic growth and international trade. A further open policy towards FDI in Hungary and China remains strong.