Abstract:

The foreign companies produce the major part of the Slovak output. These were established as a result of the inflow of the foreign direct investment. The Slovak Republic has received many investments since the year 2000 in the form of privatization and greenfield investments. Gravity model, comes out from the Newton´s physics, provides information about determinants on foreign direct investment respectively international trade. The membership in the free trade area (as the European Union) and the use of common currency (as the European Monetary Union) is considered to be one of these determinants. Is the EU and the EMU membership really significant determinant influencing the flows of foreign direct investment? Several empirical papers deal with this question and assess the role of the EMU in inflow of foreign direct investment by the use of the gravity model. The paper analyses bilateral inflows of foreign direct investment to the Slovak Republic in the period 2000 – 2012. Mainly, it assesses the role of membership in the EU and using common European currency in influencing investment flows into the Slovak Republic. Nowadays, when “two-speed” EU is discussed, not only membership in the EU, but also adopting common currency is interrogative.