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Strengthening FDI and SME Linkages in the Slovak Republic

image of Strengthening FDI and SME Linkages in the Slovak Republic

This report assesses the linkages between foreign direct investment (FDI) and domestic small and medium-sized enterprises (SMEs) in the Slovak Republic. It provides policy recommendations to national and subnational governments on how to foster productivity and innovation spillovers from FDI to the local economy. The report looks at the quality of investment the country attracts, the absorptive capacity of Slovak SMEs, and a broad range of economic, business and policy conditions that can strengthen knowledge and technology diffusion from FDI to domestic SMEs. It also provides a diagnostic assessment of the core FDI-SME spillover diffusion channels, namely value chain linkages, strategic partnerships, labour mobility, and competition and imitation effects. The report provides an overview of the Slovak policy arrangements for promoting international investment, SME performance and innovation, and regional development. It does so by taking a close look at multi-level coordination, stakeholder consultation and impact evaluation. It then reviews the policy mix in support FDI-SME linkages and spillovers and proposes concrete areas for further policy reforms. The last chapter introduces a regional lens, focusing on the regions of Banská Bystrica and Košice. This report is part of a multi-year European Commission-OECD project on strengthening FDI-SME ecosystems and is the second pilot review for future country assessments.

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Regional focus: Banská Bystrica and Košice

This chapter focuses on regional factors determining investment decisions and FDI-SME spillovers in the Slovak Republic, focussing in particular on the two regions of Banská Bystrica and Košice. The chapter firstly presents some key economic geography characteristics of the two regions. It then examines the FDI spillover potential and the absorptive capacity of SMEs in Banská Bystrica and Košice, trying to identify the competitive advantages of FDI‑SME ecosystems in the two regions. The chapter also provides some insights on regional policies and institutional frameworks to support FDI‑SME spillovers.

English

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