Culture and the timing of foreign direct investment: The case of Poland, the Czech Republic and Hungary

Most research in foreign direct investment is static: why a firm invests, which country, and which form of market entry. The question of when is considered usually only by implication---what country should be chosen now. Culture plays a role in determining market entry form, but could also impact the timing of the decision. Eastern Europe provides nearly a laboratory setting in which to investigate this phenomenon.;This study looks at majority ownership investments into Poland, the Czech Republic and Hungary made during the years of 1990 until 1999. In addition to cultural distance, relationships are hypothesized about firm size, the extent of multinational experience a firm has, the propensity to avoid risk of the firm, the profitability and liquidity of the firm, the size of the prospective market, the cost and availability of labor and the overall attractiveness of the potential investment site country.