The Geographical Imbalance in the Distribution of FDI Flows to Hungary

The history of the revival of foreign direct investment in Hungary dates back to the fall of communism, and its development can be examined from the perspective of the past thirty years. Investments – linked to the interests of mostly Western companies – can now be observed in all counties of the country, but there is a significant spatial disparity in the value of FDI inflows. While in some areas this is a major contributor to development, in other parts of the country it is a problem to attract capital, causing other social disadvantages in addition to economic deprivation. The aim of this paper is to describe the characteristics and context of domestic capital flows and to explore the causes of territorial disparities. The analysis will also cover the advantages and disadvantages that impact the areas affected by capital flow, thereby influencing the potential for further capital attraction.

Keywords: capital attraction, FDI, foreign economy, investment, transnational corporation