The Present and Future Prospects of Japanese FDI in Hungary

Abstract

Traditionally, the cornerstones of Hungary’s competitiveness in FDI attraction have been the favourable geographic location and the availability of a qualified and cost-effective labour pool. Western countries are still far the most important sources of the FDI stock in Hungary, however Japan is the second largest investor among Asian nations. Most of the Japanese FDI has been concentrated in the automotive sector and has targeted Western, Central and Northeast Hungary. Some Japanese investors have already started to locate high-end manufacturing technologies to Hungary which was in line with the country’s goal to be at the forefront of Industry 4.0. The main challenge on the Hungarian side is whether the country can ensure the necessary pool of talents and skilled labour to maintain its attractiveness and to move up in the value chain.