Český finanční a účetní časopis 2014(1):19-33 | DOI: 10.18267/j.cfuc.378

Comparison of the Effects of Foreign Direct Investment on the Current Account of the Balance of Payments of the Czech Republic and Slovakia after the Accession to the European Union

Jana Marková

Doc. Ing. Jana Marková, CSc. - docentka; Katedra měnové teorie a politiky, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <markovaj@vse.cz>; Katedra financí a ekonomie, Bankovní institut vysoká škola, Nárožní 2600/9, 158 00 Praha 5; <markova@mail.bivs.cz>.

The transformation process in market economies is inherently connected with the inflow of foreign capital, which replaces the missing domestic resources. This also applies to the Czech and Slovak economies, whereto the capital primarily in the form of foreign direct investment has flown since the early nineties. The following article is devoted to the comparison of the impact of these investments on the external balance in terms of the balance of payments in both countries after their accession to the EU. It deals with the impact of revenues from foreign direct investment on the current account deficit of the balance of payments and methods of its coverage from the impact on the external balance point of view. Attention is also paid to the comparison of the development of the total external debt of both countries, both in terms of volume and structure of the foreign debt.

Keywords: Balance of payments, Foreign direct investment, Reinvested profit, External balance, External debt.

JEL classification: E52, F21

Published: March 1, 2014  Show citation