Factors affecting allocation of czech FDI in EU countries
Factors affecting allocation of czech FDI in EU countries

Summary/Abstract: The main objective of this paper is to analyse which factors have an impact on the allocationof Czech foreign direct investment (FDI) in EU countries. Multivariate panel regressionwith general macroeconomic variables and time dummy variables using Eurostat datafor the period 2013–2019 was performed. Indicators of a tax system promoting and/or enabling aggressive tax planning, and other more general indicators were includedin the model. This paper provides the opposite view by analysing the flow of FDI froma transition economy to more advanced economies. The results suggest that Czech FDIis placed in developed countries with lower statutory corporate income tax rates, andwith which the Czech Republic has a larger volume of foreign trade. Furthermore, it isconfirmed that the factors affecting allocation of Czech FDI in the EU are the distancebetween the capital cities and the existence of the so-called patent box regime.

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