Foreign direct investment in the Czech Republic and the effect of fiscal and monetary policy

This thesis set out to analyze the trend of inward Foreign direct investment (FDI) flow into the Czech Republic and find out the main factors that attract Foreign direct investment into the Czech Republic. It also looked into the effects of monetary and fiscal policies of Czech Republic on FDI. The methodology used include factor analysis using examples, correlation analysis and regression analysis which came up with an equation relating FDI to interest rate. As for the important factor that influence FDI inflow, the thesis came to the conclusion that there is not a single factor on its own that determines the inflow of FDI into the Czech economy rather a collection of factors. These factors include: skilled workforce; reliable infrastructure; cost competitiveness; high education level and the strategic location in that order of importance. Finally, recommendations are suggested to policy makers in the Czech Republic.