Austria's Cross-border Direct Investment. Survey and Position in the East

The importance of direct foreign investment has increased over the last few years. In the first half of the eighties, Austria's direct investment abroad (new investment) ranged from AS 1½ to 3 billion annually, in the second half from AS 4 to 5 billion, rising to AS 11 billion in 1989. Since then outward investment has followed a rising trend. In 1992 a record level of AS 21½ billion was reached; a decline is expected for 1993. The flow of direct investment into Austria stagnated in the first half of the eighties, but has been on the increase since 1987. A peak of AS 10 billion was recorded in 1992. Over the last few years the investment outflow was of the order of about 8 to 10 percent of Austria's total investment in machinery and equipment; investment inflow is around 5 percent. The stock of Austrian investment abroad (nominal capital) totaled AS 59 billion in mid-1993, that of direct foreign investment in Austria AS 69 billion. About half of Austria's direct investment abroad is concentrated in the EU. The share of the Eastern economies increased from 10 percent in 1989 to more than 25 percent in 1993. Some 60 percent of foreign direct investment in Austria has been undertaken by firms in the EU countries, with Germany's share amounting to 40 percent. Investment from the EFTA countries (mainly Switzerland) accounts for 20 percent, investment from the U. S. for 7 to 8 percent. For mid-1993 the stock of foreign direct investment in the Eastern countries is estimated at $ 16½ billion. This figure might have risen to at most $ 19 billion at the end of 1993; a more cautious estimate is $ 13 billion. On a per-capita basis, foreign direct investment is highest in Hungary and Slovenia (almost $ 550 each). The comparable figure for the Czech Republic is $ 240, $ 60 for Slovakia, $ 50 for Poland and the Baltic countries. Privatization in Eastern Europe has increased the number of shares traded on the stock exchanges; in most cases no restrictions apply to foreigners. The volume of portfolio investment remains low, however, and is estimated at $ 375 million in the first half of 1993. In mid-1993 the stock of Austria's direct investment was AS 17.1 billion (AS 11.8 billion (69 percent) in Hungary, AS 3.3 billion (19 percent) in the former Czechoslovakia, and AS 0.8 billion (5 percent) in Slovenia. Austria's share in the stock of direct foreign investment in the East in 1992 was 8½ percent, 10 to 13 percent in East-Central Europe. These figures correspond roughly to Austria's share in exports to these countries (1992 7.2 percent), though are markedly higher for the countries of East-Central Europe.