DOI: 10.11118/978-80-7701-082-5-0009

High-level Political Visits and Foreign Direct Investment: Evidence from the Czech Republic and Slovakia

Matúš Bilka ORCID...¹, Filip Šandor ORCID...¹, Daniel Gurňák ORCID...¹

¹ Department of Regional Geography and Regional Development, Comenius University, Bratislava, Slovakia

This paper investigates whether official high-level political visits by Czech and Slovak government officials foster inward foreign direct investment (FDI) from partner countries. Using panel data for 184 partner countries of the Czech Republic and 171 partner countries of Slovakia over the period 2018–2023, we estimate Poisson pseudo–maximum likelihood (PPML) gravity-type models with Mundlak correction. The model specification accounts for economic size, distance, institutional factors represented by EU membership, socialist legacy, embassy presence, and the exogenous shock caused by the COVID-19 pandemic. Contrary to expectations, official visits, both contemporaneous and lagged, exhibit no statistically significant effect on inward FDI flows for either country. Instead, structural determinants dominate. Distance exerts a strong negative effect, while the larger size of partner economies, embassy presence, and EU membership of the partner country are positively associated with inward investment. The results also point to persistence, consistent with the hysteresis literature, suggesting that established economic ties and market size explain most of the variation in FDI inflows. These findings support recent meta-analyses showing that official visits are largely symbolic, while long-term economic fundamentals and institutional integration remain the principal drivers of bilateral investment.

Klíčová slova: FDI, Economic Diplomacy, Official Visits, International Relations

stránky: 9-17, online: 2026