Localizing Origin of Foreign Investments in the Czech Republic, or When Is a Foreigner One of Us

Promotion of foreign investment is a well-established practice in many countries with an inadequate capital base, and the benefits of this type of investment, particularly in the form of positive spillover effects on the domestic economic environment, have been repeatedly confirmed by numerous studies. However, still not enough attention is paid to the definition and actual content of the word "foreign" in the phrase foreign direct investment in the domestic environment. This methodological essay attempts to fill that deficit and, using the concepts of foreign and domestic roundabout investment, to propose a categorization of capital investment which would take into account both the actual origin of the investor and the actual place of production or provision of the service, as well as the perception of the product or service as foreign or local. The resulting categorisation matrix is then populated with concrete examples from Czech practice and commented on in detail. The matrix can close the gap in the current Czech literature, which concentrates on the terms "foreign" or "domestic" more than on their very substance and their material meaning.

Keywords: Foreign direct investment, spillover effects, economic development, roundabout investment