Foreign Controlled Companies in the Czech Economy

• Main Author: Drahomíra Dubská
• Format: Article
• Language: English
• Published: Czech Statistical Office 2012-06-01
• Series: Statistika: Statistics and Economy Journal
• Subjects: Foreign direct investment; institutional sub-sector; foreign controlled companies; Czech Republic
• Online Access: http://www.czso.cz/csu/2012edicniplan.nsf/engt/2B0046B503/$File/e-180212q2k1.pdf

The article analyzes infl ux of foreign direct investment into the Czech Republic from the territorial point of view and partly from the perspective of receiving branches. However, it is primarily focused on impacts of this infl ux, i.e. creation of an institutional sub-sector of foreign controlled companies. They operate mainlyin the sector of non-fi nancial corporations and dominate in sector of fi nancial institutions in the Czech Republic. This analysis is concentrated on the weight of foreign controlled companies on the performance and income characteristics of these two sectors and Czech economy as a whole, as well. Development of output, intermediate consumption and gross value added is used for non-financial foreign controlled companies as the performance characteristics and then profi ts and paid-out wages as the income characteristics. Problem oftaxes paid by these companies to the state budget is mentioned and development of their investment in fixed assets, as well. Financial foreign controlled companies are viewed in terms of their proportion of total assets, loans and deposits, capital and reserves and capital adequacy ratio. Finally, impact of foreign direct investment on employment and gross value added in branches of economy is analyzed and double-tracking in industry is identified. Conclusion summarizes benefits and negative effects of the foreign controlled companies in the Czech Republic within their existing presence in 1995–2009.