The regional position and economic effects of foreign direct investment

Among the main world economic features in recent decades has been marked acceleration in the flows of operating capital into regions, countries and regions within countries, coupled with uneven distribution of such capital. At the end of 2002, the developed countries held two-thirds of the investment of operating capital, while developing and transforming countries shared only one-third. Sixty-three per cent of all FDI in Asia went to China and Hong Kong, while Brazil and Mexico took 51 per cent of Latin America's, and the Czech Republic, Poland and Hungary 58 per cent of Central and Eastern Europe's. In Portugal, 80 per cent of the foreign investment occurs in Lisbon and environs, while almost 70 per cent in Spain goes to Madrid. It is generally possible to show a connection between regional indices of economic development and stock of investment of operating capital, and foreign investment has become an economic space-forming factor. The article uses the example of Hungary to examine connections between investment of operating capital and regional economic development. The authors present the spatial distribution of foreign investment, changes in this, and regional trends in economic growth, investment, sales, exports and employment. Statistical indices are used to examine the contribution of FDI to economic inequality and its space-forming role in Hungary.