Adam Geršl, Michal Hlaváček
This article discusses the potential risks to price stability stemming from the influence of foreign direct investment on the economy. The analysis uses corporate data from a unique Deutsche Bundesbank database containing an almost complete sample of German enterprises that invested in the Czech Republic between 1996 and 2004. Attention was given to two issues: the role of intra-group financing in foreign-owned corporations, including its potential effect on financial intermediation in the economy as a whole, and the life cycle of an investment as an indicator of possible investment outflows in the future.
Issued: June 2007
Download: Thematic article in the Financial Stability Report 2006 (pdf, 234 kB)