Grant-funded Project Nr. 324/2004/B-GEO/PřF
Final Report

Project title:Foreign Investors in the Czech Republic, their Contact Systems and Regional and Local Social and Institutional Networks
Research leader:Mgr. Jana Spilková, 2002
Co-researcher: Prof. Petr Dostál, M.A.,Ph.D.; Mgr. Pavel Csank
Period of project:2004-2004
Overall grant:200 000 CZK

Project Results

Grant GAUK nr. 324/2004 is a continuation of the research activities that started under the heading of grant GAUK nr.198/2003 which provided an effective theoretical framework for further systematic research on the issues of contact systems formation and agglomeration factors. Grant 324/2004 has made the best of this knowledge of theoretical foundations and enriched it in its second stage. This enrichment was presented by a survey whose aims were to understand (i) the character of spatial perceptions and images of foreign entrepreneurs from various points of view and find out (ii) what are the main factors influencing location decisions of foreign investors within our country, (iii) what is the importance of agglomeration factors when location of a firm is to be chosen, and (iv) which areas are highly evaluated by the foreign entrepreneurs.

On the basis of the data obtained by the survey the basic map of ratings of particular Czech regions by the firms of foreign investors was created. This primordial map of preferences shows very clear preferences of the central part of the Czech Republic - the capital city of Prague and its wider surroundings. As a second important feature of the basic geographical pattern of preferences there are the larger Czech agglomerations (forming a mezzo-regional hierarchical level) and their outskirts with higher preference scores; however, even some larger cities (located in peripheral parts of the national territory) are evaluated with lower preference scores. A third main feature of this basic map is obviously shown in very low scores for the peripheral areas of the Czech Republic.

In the subsequent statistical analysis the impacts of firm characteristics upon the preference scores of Czech regions was investigated. It was established that these characteristics influence the preferences only to a very limited extent and their significant influence was always indicated for a small number of regions. Nevertheless, a further analysis of specific maps concerned with the particular firm characteristics provided some interesting results. The strongest influence on the total ratings of regions has the current location of foreign firm in the Czech Republic. The most clear feature of all the preference maps is without any doubt the preference for one´s own region and then the preference for large agglomerations and the central part of the CR. The spatial pattern of preferences is also influenced by the industrial sectors to which firms belong. The extreme case is presented by the top of the tertiary sector – financial services. The firms from this sector prefer clearly only the leading big cities and the rest of the CR remains without any interest of the investors from this sector. Some differences can be identified in the preference scores also due to the country of origin of the investor.

The multiple regression analysis exploring the effects of location factors on the total ratings revealed that 74 % of variance in the ratings of regions (70 district units) can be explained with a small number of explanatory variables. The location variable distance to Prague (less important is the distance to the Bavarian border) appears to be an important explanatory variable. There is also established the importance of the variables indicating the educational level of regional populations in major educational categories, mainly the university level and vocationally training level in 2001 and also increasing university level graduates during the transformational period 1991-2001. The main factors affecting the preference of regions by the foreign entrepreneurs are therefore: relative location to Prague and Central Bohemia, endogenous human resources and socio-economical level of regions (i.e. 70 district units).