Escape FDI and Institutional Arbitrage: Home-Country Drivers of South African Investment in Hungary

Abstract

Foreign direct investment from emerging economies has increasingly diversified geographically, yet investments from African multinationals into Central and Eastern Europe remain underexplored. In particular, South African FDI in Hungary represents an unusual case, given the limited historical and economic ties and structural differences between the two countries. This paper investigates the drivers, structure and developmental implications of South African FDI in Hungary, with the aim of explaining why firms from a distant emerging economy invest in a medium-developed EU member state. The analysis adopts a mixed-method approach, combining macro-level FDI statistics, foreign affiliates statistics, firm-level database analysis, and five interviews with company representatives and experts. The results show that South African FDI in Hungary is small, volatile and structurally heterogeneous. Investments are dominated by financialised real