Austrian FDI in Eastern Europe

It was not until the late 1980s that Austria began to emerge as an international investor, in consequence of ongoing and deepening European integration and the opening of the East. Austrian companies were among the first to exploit the new opportunities available in the CEECs after 1989, and to invest in local companies. Drawing on their information edge, they were able to assess the risks of investing capital better and faster than their competitors. Their long-standing contacts were found to be highly useful, especially in the first phase. The growth of FDI in Eastern Europe was further helped by innovative aid schemes. Already in 1990, Austrian direct investments in the CEECs made up ATS 4.8 billion. The impressive start, however, was not followed up. Until 1996, annual investment flows remained in the range of ATS 5 to 6 billion. It was only in 1997 that a new upturn was recorded (ATS 11.9 billion), which appears to have continued in 1998 (ATS 5.8 billion in the first six months).