1 1Economic Affairs Officer, United Nations Conference on Trade and Development, Geneva, Switzerland. The views are those of the author and do not necessarily reflect the opinion of the United Nations. The author is grateful to Alexander Bulatov, Moscow State Institute of International Relations, Russian Federation; Andrea Éltetö, Institute for World Economics, Budapest, Hungary; Kari Liuhto, Lappeenranta University of Technology, Finland; and Marjan Svetlicic, University of Ljubljana, Slovenia, for their comments. All the remaining errors are the sole responsibility of the author. The author may be contacted at: «email@example.com».
The stages of the Im are: Stage 1-low inward and outward FDI, net inward investment position; Stage 2- high inward and low outward Fm, increasingly net inward investment position; Stage 3-outward investment catches up with inward investment; Stage 4-outward Fm exceeds inward FDI; Stage 5-net outward position falls again and Huctuates around zero. 2 System-escape Fi)i was first described and analysed in detail by Marjan Svctlicic, Matija Rojec and Simona Lebar, 1994.
' Currently, the Slovenian government seems to hold a more favourable opinion about the potential benefits of outward FIJI than do certain parts of the research community who are still sceptical about it.
I The book value of Soviet companies abroad was considered to be US$ 2 billion at the beginning of the 1990s (Sokolov, 1991) and the market value US$ 10 billion (Gorshenin, 1995). 1 These investments had been registered as domestic investment in the Union of Soviet Socialist Republics and became foreign assets once those Republics gained independence.
" See f3hagwati, 1974.
7 The balancc-of-payrnents statistics of the Bank of Russia differentiate between transactions carried out with the CIS and those carried out with the rest of the world; further breakdown is usually not available.
8 This "return capital", however, is not the same as "round-tripping" as described in various WorldInvestmentReports (see, for example, UNCTAD, 1999, pp. 71 and 75-76). In the first case, the original intention of the investor was to build a "safety nest" abroad; permanent return home comes later as a reaction to a better business environment in the home base. In the latter case, the original intention was to take (mostly fiscal or regulatory) advantages to be derived exclusively from foreign presence and to use these advantages to strengthen the competitive position at home.
I The Website of Corvinus gives a detailed description of its activities: «http://vvww.corvinus.hu/angol/ index/indcx cnglish.htm».
Source: Based on information provided by Corvinus International Investment Ltd.
1(1 For a detailed discussion on the concept of inherited FDI and its role in Slovene outward FIJI, see Svetlicic, 1997. 11 A qualification to this observation is the fact that outward FDI data, however, do not reveal the underlying restructuring taking place in this area. A survey of major Slovenian enterprises carried out in 1996 (Krasovec, 1996) revealed considerable structural changes. A new motive for outward FDI was the search for new markets, bringing new finns into the FDi arena while traditional investors were still divesting.
r2 For example, in the early 1990s, outward investment was authorized only if it was financed from the investing firm's profits. Firms were not allowed to draw on loans to finance investment abroad.
" In that year, too, the Ministry of Economy also adopted a programme ofpromoting the internationalization of Slovene firms.
�a Another indication of Croatia's delayed integration into international frameworks is the fact that it joined the World Trade Organization only on 30 November 2000.
�� Outward FDI by foreign affiliates is also frequent in the Baltic States and the Czech Republic.
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