POTENTIAL OF THE CZECH BUSINESS ENVIRONMENT ASSUMES THE EFFECTS OF FOREIGN DIRECT INVESTMENT
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Foreign direct investment, foreign presence, labour productivity, technology gap
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The localisation of foreign capital affecting both the immediate and future situation of the host locality in a number of ways. The positive effects of the location of FDI are welcomed all over the…more
The localisation of foreign capital affecting both the immediate and future situation of the host locality in a number of ways. The positive effects of the location of FDI are welcomed all over the world, and their emergence is supported by the granting of investment incentives. The question is how to correctly measure these effects, but also the potential of specific areas to accept them. The aim of this contribution is to determine the size of the technology gap between FDI supported by investment incentives and the business environments in a group of six regions of the Czech Republic as well as to determine the absorption capacity of the technology transfer of these regions. Based on shift-share analyses, an indicator quantifying the size of the technology gap at the regional level of NUTS 3 has been constructed. This indicator has been supplemented by an indicator of technology transfer intensity. The benchmarking method illustrates the absorption capacity of the Czech business environment in an interregional comparison reflecting the strong and weak sides of the Czech regions in terms of absorbing the benefits of locating multinational corporations in their territories. The calculations and analyses have proved the leading position of the Plzeň Region, which takes advantage of its geographical position as well as its historical industrial tradition. At the same time, the high absorption capacity of the Hradec Králové Region, a region with a high potential for intensive growth, has been identified. On the other hand, the Karlovy Vary Region has been an outsider in the examined set of regions. In the long run, this region has not been and will not be able to attract at least a satisfactory level of foreign presence from which the region could positively benefit and start its economic growth.