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Vienna (pte032/25.02.2003/13:29) - Austrian firms are flocking to the east in a new investment boom, as reported in a study published today by the Vienna Institute for International Economic Studies (WIIW) http://www.wiiw.ac.at and the Austrian Institute for Economic Research (WIFO) http://www.wifo.ac.at .
In the first half of 2002, direct investments in eastern Europe peaked at 1.6 billion euros, while the Austrian market share of new investments climbed from 8 per cent in 2001 to over 10 per cent in the first half of 2002.
Analysts attribute the boom to an interest in securing new markets and profitable eastern subsidiaries. The positive closure of EU expansion talks in Copenhagen in December 2002 may also have provided new impulses for eastward growth.
The Czech Republic has been most attractive to Austrian firms due to its proximity and the relatively high buying power of its citizens. It has remained the most important investment target since 1998, replaced only briefly by Slovakia in 2001.
In the first half of 2002, a total of 0.7 billion euros flowed from the Czech Republic - comprising 40 per cent of all eastern investments. The Czech industrial tradition and trend toward privatisation are attractive to Austrian firms seeking new manufacturing locations or takeover opportunities.
The second most important country was Croatia, where investments totalled a surprising 0.3 billion euros considering that Croatia is not one of the upcoming EU entry candidates. Experts attribute this trend to the increasingly solid economic and political infrastructure in Croatia.
New investments in Slovakia and Hungary reached 0.2 billion euros each in 2001, making up half the total investment volume. Investments in Poland continued to lag behind at 80m euros in 2002.
Most direct investments in eastern Europe have proven profitable, according to the study. After a difficult transitional phase in the mid-90s, the majority of Austrian firms have been reaping high profits from their efforts in the east.
The complete study can be purchased and downloaded in German at http://titan.wsr.ac.at:8880/wifosite/wifosite.get_abstract_type?p_language=1&pubid=23518
General strategies for international investment and growth on new markets, specifically directed at venture capitalists, will be the focus of the Venture Journey Europe congress in April.
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