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Intensity of foreign investment promotion and development levels in Central–Eastern European regions

Paweł Capik (Bristol Business School, University of the West of England Bristol, Bristol, UK)

Journal of Place Management and Development

ISSN: 1753-8335

Article publication date: 21 September 2020

Issue publication date: 28 May 2021

139

Abstract

Purpose

Investment promotion is gaining in popularity, yet its relationship with regional development remains unclear and under-investigated. The purpose of this paper is to combine place marketing and regional development concepts to explore investment promotion in the Czech, Polish and Slovak regions. It identifies elements of best practice and investigates to what extent these are used in foreign direct investment promotion conducted by regional authorities. Organisation- and implementation-related elements are studied. The discussion aims to answer the question of how systematic Central–Eastern European regional investment promotion is, and what are the factors determining regions’ involvement in, and the extent of, promotion activities.

Design/methodology/approach

Discussion is based on an original survey of Central–Eastern European (CEE) regional authorities' investment promotion. The paper develops a measurement of regional authorities’ engagement in investment promotion – an investment promotion index (IPI) and using non-parametric, two-tailed Spearmans correlation test investigates the relationship between IPI and socio-economic conditions in the regions. Kruskal-Wallis, a non-parametric test of difference is used to investigate statistical significance of differences in mean values between the three countries.

Findings

The analysis provides early insights into the relationship between regional development and investment attraction – the main theoretical contribution of the paper. Diverse levels of engagement in promotion are not influenced by the staple competitiveness factors of gross domestic product growth rates or foreign direct investment stock. Instead, it is conditioned by labour market situation in the countries studied.

Originality/value

Investment promotion relationship to regional development remains under-explored. The main focus of the analysis offered is the varying levels of CEE regional authorities’ involvement in investment promotion and its relationship to the socio-economic conditions prevailing in the regions. Exploring this relationship, the paper provides original contribution in the following two aspects: it establishes a systematic way of measuring regional authorities’ engagement with investment promotion; and it links the level of investment promotion to wider development of the regions.

Keywords

Acknowledgements

The author is grateful to the anonymous reviewers who provided extensive, constructive guidance on how to improve this paper. He thanks to Dr Andrew Johnston for his help with statistical calculations. He also extend his thanks to Place Management and Branding and Academy of International Business conference participants for helpful suggestions on early versions of the paper. Remaining imperfections remain his own responsibility.

Citation

Capik, P. (2021), "Intensity of foreign investment promotion and development levels in Central–Eastern European regions", Journal of Place Management and Development, Vol. 14 No. 2, pp. 114-133. https://doi.org/10.1108/JPMD-07-2019-0070

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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