Poland & Czech Republic FDI - Analysis of differences in FDI and the influence of EU membership

In this research paper the relationship between EU accession and inward Foreign Direct Investment and the determinants for inward Foreign Direct Investment (FDI) are researched. The research question is: “How can the differences in Foreign Direct Investment between Poland and the Czech Republic between 1993 and 2012 be explained and how is FDI affected by EU membership?” Based on previous research we test several determinants for FDI and assess the impact of EU membership. The research has shown a strong correlation between inflation and FDI. In addition EU accession has shown to have a significant effect on trade costs, which influence FDI. Other determinants, including a skilled workforce and wage costs did not show a straight forward causal relation with regard to FDI.