Robert Musil: Foreign Direct Investment from Vienna in Central and Southeast Europe 409 L I T E R A T U R E Hungarian Geographical Bulletin 62 (4) (2013) pp. 409–414. Robert Musil: Foreign Direct Investment from Vienna in Central and Southeast Europe. Atlas of Eastern and Southeastern Europe. Institute for Urban and Regional Research of the Austrian Academy of Sciences, Vienna, 2011. 60 p. Globalization has displayed acceleration since the 1980s. Foreign investments have played a giant role in that process. During the last decades, not only the amount of invested capital has increased, but also the destinations of investments have changed a lot. It can be seen particularly, aft er 1989 when the former European socialist countries successfully put them- selves “on the map of investors”. (Aft er World War II this part of Europe received only a small share of the foreign investments.) Since then, the amount of the capital invested in Central and Southeastern Europe has continuously increased and in 2012 the rate of the global investments has reached 11%. Studying of the origin of the invested capital in a given region can also be important. That is why this publication is interesting. It was submitt ed by Robert Musil and published by the Institute for Urban and Regional Research of the Austrian Academy of Sciences in 2011. In the litera- ture publications like the “Atlas of Eastern and Southeastern Europe” demonstrating the foreign invest- ment coming from a capital city in details are rare. In fact, the publica- tion itself is a text accompanying the maps and its title is “Foreign direct investment from Vienna in Central and Southeastern Europe.” The Atlas consists of four col- ourful maps, the titles of which are the followings: Map 1: Active FDI stock 1993–2005, gross regional product 2005. Map 2: Employees in branches of Viennese headquarters 2005, share of the tertiary sector in the total of employees. Map 3: Development of passive FDI stock 1993–2005, infant mortality 2005. Map 4: Origin of active di- rect investments 2005, population density 2005. – – – – 410 Each map demonstrates the foreign direct investments in Central and Southeastern Europe in an interesting and special approach. In addition, the explanation of the maps provides a theoretical and methodological background. The text has six major parts and nine chapters. Taken as a whole, it is a short publication with 30 pages, but as it is bilingual, its total length is 60 pages. The fi rst half of the text is in German and the second half is in English. It would have been useful and advantageous to have the English version checked by a native speaker. The great advantage of the bilingual version is that much more people can read and use it. The fi rst part, the “Introduction” has got an interesting subtitle: “Foreign direct invest- ment (FDI) from Vienna, the Wild East and selling of the family silver…”However, the term “Wild East” is not defi ned exactly. Instead, we get information on the reason for publishing of the atlas. Several reasons were mentioned, but the most important one was the “delayed internationalization of the Austrian economy”. The phrase “selling off the family silver” was used by the Austrian media when the acquisition of e.g. Bank of Austria took place, although the author remarked that “very litt le understanding is expressed when the situ- ation is reversed”. For example, when OMV intended to acquire the Hungarian Mineral Oil Corporation (MOL). The second part (Foreign direct investment: defi nition, data and methodology) focuses on the defi nition of the concept of FDI; the data and methods. Foreign direct investment is one of the main forms of the international investments. It is generally a long term investment in contrast to portfolio investments. Its purpose is not only an investment in another country, but also the control of business activities of a given company. As a consequence, the concept for FDI given by the Austrian National Bank and adjusted to the guidelines of the OECD can be entirely accepted. According to it, “foreign direct investments can be considered as capital investments which are made by investors with the intention of establishing and maintaining a permanent economic relationship with business in another country. Simultaneously, they intend to exert their infl uence upon the management of the company in question”. There are four types of FDI (the establishment of new companies, mergers, acquisitions, profi t reinvestments). Lately, a shift has taken place in favour of mergers and acquisitions. They account for about 80% of all new investments. Indeed, FDIs can be considered as the “vehicle of the globalization”, because transnational companies (TNCs) use them to expand the global network of their locations and to create global chains. FDIs can also be classifi ed by the direction of investment and it can be active or passive. “Active investments emanate from a domestic business and are destined for a foreign coun- try, while passive investments fl ow in the opposite direction, arriving inland from abroad.” The author also emphasized that the indication of direction must always be considered as relative, “from the perspective of the observer”. According to Musil, studying FDIs is a fascinating subject for geographical researchers because they can be spatially determined. In other words, FDIs can be studied well in space from a geographical viewpoint. Foreign direct investments are usually motivated by diff erent reasons, the most impor- tant ones are the followings: market or sales orientation, cost orientation, supply security, acquisition of technical knowledge. Those factors can be combined to a diff erent degree. At the beginning, mostly the fi rst two reasons were important in FDIs, but nowadays the acquisition of technical knowledge is gett ing more and more important for the companies located in Central and Southeastern – – – – 411 Europe in order to get technological knowledge from the East European and North American corporations. Viennese investments into the countries of Central and Southeastern Europe have two main reasons: market orientation and cost orientation. The data of maps refer to the years 1989–2005. That period refl ects the internationaliza- tion of the Austrian economy. It is a pity that data aft er 2008 are not available, because the impacts of the economic crisis which broke out in 2008 particularly aff ected the Viennese investors and thus Central and Southeastern Europe. The researched area which is pre- sented on the maps has 137 regions at NUTS-2 and NUTS-3 level. The third part (“The internationalization of Vienna through foreign direct investment – the initial geopolitical and macroeconomic situation”) which have fi ve chapters, draws a historical overview about the eventful relationship between Vienna and Central and Southeastern Europe and about the role played by Vienna in the development of the region during the diff erent historical periods. Gett ing acquainted with the past is extremely important to be able to interpret the cur- rent processes “described on the maps” as the historical past considerably aff ects them. The author also pays a special att ention to the development and structure of FDI from Vienna aft er 1989, because that year was a relevant turning point for the Austrian capital city. Since then, the role of the city in foreign capital investments and employment has become even more important. This part of the text also gives a response to the question whether Vienna is a bridgehead between West and East. The geographical location of the capital city, its geopolitical situation, historical connections and cultural factors “also prompt the investors from Vienna to focus on the regions formed part of the Danube”. The central role of Vienna is well-refl ected – among the others – by the direct fl ights from Vienna to the Eastern parts of Europe. It is demonstrated in Figure 4 in, while Figure 7 illustrates “the most important locations according to the balance of profi ts, weighted by the volume of active and passive FDIs”. On the map, it can be clearly seen that the regions situated east from Vienna receive more investments from the city than others. In the fourth part (titled “Spatial patt erns of foreign direct investment from Vienna in Central and Southeast Europe”) the spatial distribution of FDIs (coming from) from Vienna in Central and Southeast Europe is analysed by three diff erent factors (distance, agglomera- tion, the level of development). In fact, it looks for the explanation of three key questions: How do the FDIs (coming from) from Vienna are distributed in space, namely, in Central and Southeastern Europe? What are the reasons for that? What kind of structural diff erences exist between those locations? In the fi rst three chapters the author examines the regional distribution of active direct investments with regard to their correlation with the three factors mentioned before, then he provides information on the sectoral structure and the origin of active direct investments in 2005. The fourth chapter puts the emphasis on the analysis of the origin of passive FDIs invested in 1993–2005 from diff erent aspects. In 1990s Budapest was the number one destination of the ten most important investment locations among cities of Central and Southeastern Europe, but aft er the turn of millennium, Prague took over its place. Foreign direct investments from Vienna are characterized by a considerable spatial concentration. In the 1990s approximately two thirds of the invest- ments were concentrated within 250 km of Vienna. Between 2003 and 2005 the investments in location more than 500 km from Vienna increased and they accounted for 34% of the whole investments. The main reason for that shift is the increasing importance of those distant markets. According to the sectoral structure, the locations were classifi ed into four main groups with about 206 thousand employees: – – – 412 industrial locations: where 75% or more of employees work in the industry consumer-oriented service locations: where 75% or more of employees work in the service industry, mainly for commerce. producer-oriented service locations: where 75% or more of employees work in services, mainly for fi nancial sectors, telecommunications. mixed locations: neither industry nor service dominant. The fi rst group is the largest one, because 36 of 86 investment locations were industrial locations. Almost 64% of the investments fl owed from Vienna in Central and Southeast European countries come from its urban fringe. Only a few locations which are usually peripheral regions (like Somogy County in Hungary) have exclusive investments originat- ing from the urban fringe of Vienna. The last part of the text contains the sources and the literature. They give an opportunity for the readers to deepen their knowledge in this special fi eld. In the text, there are 16 tables and 13 black and white fi gures providing important infor- mation and completing the text on the FDIs from Vienna in Central and Southeast Europe. They also promote the bett er understanding of the fl ow and nature of FDIs. Taken as a whole, this publication can be very useful for people interested in the fate of Central and Southeastern Europe and in their economic processes, particularly in the spatial characteristics of FDIs. Éva KISS – – – –