FDI and the Liberec Region: the Case of the Labour Market

Foreign direct investment accelerated over the past two decades as a result of the processes of globalisation and liberalisation. In addition to its other impacts, FDI changed the operation of developed market economies and integrated them more in the global economy. At a broader level, FDI also influenced undercapitalised transition economies after the fall of the communist regimes of Central and Eastern Europe and the transformation process itself. What is more, foreign direct investment influenced transition economies at a national level and in the regions into which it flowed. The first part of the paper considers the theoretical background of FDI and the effects of FDI on a transition economy, especially its effects on the labour market. We consider labour market conditions to be a key in taking decisions on FDI. The second part analyses labour market development in the Liberec region, where the authors are based, and follows its development over the long term. We analyse sectoral and educational structures in the Liberec region and compare these with national figures. The final section focuses on a dependence analysis, applying a statistical method to describe the correlation between FDI and employment in the Czech Republic and in the Liberec region. The aim of this paper is to compare the labour market situation in the Liberec region and that of the national economy in order to demonstrate the specifics of particular regions within the national economy and to analyse the impact of FDI on the regional labour market.