The restructuring role of outward foreign direct investment by Central European firms: The case of Slovenia

A survey of selected theories relevant to foreign direct investment abroad is the basis for predicting when outward FDI from more developed Central European Countries begins. Slovenian experiences are used as case studies. Although inward FDI is still dominant, outward FDI is picking up in terms of sales operations in developed countries, but also as manufacturing units in other Central European countries. It is argued that outward investment can promote the restructuring of traditional industries. Outward FDI is starting today at an earlier stage of development, not only as a result of the accumulation of firm-specific advantages, but also from a position of weakness in order to learn from abroad and to strengthen competitive advantages. Outward FDI enhances the process of restructuring where such internationalisation is synchronised with the loss of comparative advantages of home countries. The case of Slovenia is evaluated in terms of geographical allocation of such investments, sectoral distribution and dynamic changes.