In Playing catch-up, EY took a close look at the role that emerging markets have played in Europe’s FDI story. EY`s report provides insight for companies' investment plans, particularly directed toward Europe's emerging markets.

The shift in the balance of power from the developed world to the developing world is not new, and in 2012, FDI inflows have mirrored this broad economic change. This trend continued in 2013, when developing economies received more than half of global FDI inflows.

However, the economic downturn has resulted in some changes in the investment appeal of the continent’s emerging investment destinations.

Countries in Central Eastern Europe (CEE) that emerged as FDI hotspots in the early 2000s — such as Poland and the Czech Republic — fell behind their Western European counterparts after the crisis.

Guntars Krols, EY partner Baltic States: „The crisis had a significant impact on the FDI map of Europe. Following the crisis, the number of FDI projects in CEE declined by 12% — this compares with a 19% increase in Western Europe for the same period. This slowdown in FDI activity can be attributed to CEE’s high exposure to European countries, a fragile banking sector and heavy dependence on consumer credit. Latvia managed to increase its attractiveness for investment, and secured place in the most attractive CEE`s TOP10.”

Click here to read more about the research.