External Economic Relations of the Slovak Republic: Trade, Investment, and Related Policies

Abstract

Given the fact that Slovakia is a small, open, export-oriented economy strongly dependent on foreign trade and foreign direct investment (FDI) inflows, this chapter seeks to analyze the country's performance in international trade and investment flows as well as its foreign economic policy in the field of export and investment promotion. This chapter points out that Slovakia's foreign trade and inward FDI flows are highly interconnected due, inter alia, to the lion's share of foreign companies in Slovak exports. In addition, Slovakia's largest comparative advantages in exports are “acquired” through FDI inflows and include products of the automotive and electronics industries. However, the way in which Slovakia is involved in international trade and investment flows reflects its reliance on lower value-added economic activities, such as, in particular, the assembly of motor vehicles from imported intermediate products. In order to increase international competitiveness of the Slovak economy and ensure its future economic growth, it is important to improve the effectiveness of Slovakia's foreign economic policy and economic diplomacy, diversify the territorial and commodity structure of Slovak exports, support the expansion of Slovak companies abroad, as well as attract FDI with higher added value and to less developed regions.

Citation

Jančovič, P. (2024), "External Economic Relations of the Slovak Republic: Trade, Investment, and Related Policies", Augustín, M., Jančovič, P. and Sergi, B.S. (Ed.) Modeling Economic Growth in Contemporary Slovakia (Entrepreneurship and Global Economic Growth), Emerald Publishing Limited, Leeds, pp. 121-143. https://doi.org/10.1108/978-1-83549-454-720241010