【正文】 analysing how the characteristics and policies of the host countries will influence the motives and experiences of Asian investors in CEE and the impact of such investment on the economies, it will be wiser to focus on the concepts of the positive impacts of FDI from the work of Phisalaphong (2021) and Dunning (1993b). The benefits are explained in two aspects: The spill over of technology and other positive externalities and indirect employment effect. The spillover of technology occurs in two ways, the vertical and horizontal spillover. According to Phisalaphong (2021), horizontal spill over is an improvement of the productivity 11 of local firms, as the entry of foreign petitors in the local market serves as a showcase to them and as an education provider for local personnel. Vertical spillovers occur when foreign firms have an impact on the local suppliers and consumers. Vertical spillover is also identified by Dunning (1993b) known as the backward linkages which are the purchases of goods from local suppliers which in turn stimulates local entrepreneurship1. Spillover of technology is highly dependent on the level of technological sophistication of the foreign firms, the capacity of local firms to absorb foreign technology and on the extent to which foreign firms are integrated in the local industrial fabric (Nicolas, 1995). Toyota: The reluctant multinational The decision to invest in the Czech Republic Toyota is the world third largest carmaker and by far the leader of all Japanese carmakers. Toyota lagged behind pared to the other major Japanese automakers, in local production and the setting up of regional headquarters (Kumon 1998). This was because of its prudent strategy of avoiding risky overseas ventures and the importance of its home market. There was a change Table 1. Distribution of cases by sector and host country Sector Host country Poland The Czech Republic Hungary Electronics Matsushita electric (Japan) LG (Korea) LG (Korea) Automobiles Daewoo (Korea) Toyota (Japan) Suzuki (Japan) Toyota (Japan) 1 For example, firms that have worked with the MNE may gain additional clients and contacts and entrepreneurship could be stimulated (Floyd 2021). Asian FDI in Central and Eastern Europe and its impact on the host countries 351 in the mentality of overseas investment when Toyota elected Hiroshi Okuda as president of the pany2. Toyota is strong in its domestic market, has a number of subsidiaries and production facilities in Western Europe and is expanding quickly only after 1999 into CEE to take advantage of the opportunities there. The Czech Republic offers low production costs, stable economic factors and its imminent European Union (EU) membership in 2021 provides access to the EU markets. Kolin may not be the best deal as Czech workers already earn more than three times pared to Romania, and their wages are still rising (Business Week, 15 November 2021). But the productivity of the Czech workforce is a pensating factor. The Czech Republic is home to 97yearold Skoda, which was acquired by Volkswagen (VW) in 1991. VW introduced western quality controls and work habits to the Czech labour force and further built a work of Czech suppliers, who provided half its inputs by value. Besides that, Toyota was allowed to choose the location of its new plant. The Czech government granted generous investment packages to the new plant of Toyota and PSA in which the plant would get public support worth 5–15% of its value, that was, 12 EUR75–225 million (CTK Business News Wire, 7 January 2021). Likewise, the package included a token fee of kc1bn for the site and free infrastructure that were in line with EU legislation (Global News Wire, 7 January 2021). Jobcreation and training grants were also given and Toyota was exempted from paying corporate tax for ten years. All these government incentives are another pull factor drawing Toyota to invest in the country. Strategy Toyota entered into a joint venture with PSA Peugeot Citroen of France, the European champion of diesel cars for production of small cars in the $ billion factory in Kolin, the Czech Republic in 2021. It was the largest single greenfield investment in the Czech industry ever. Starting in 2021, the plant will assemble 300,000 minicars a year, all priced under $7,500 which is 50% less than Toyota’s Yaris, its entrylevel model for the European market (Business Week, 15 April 2021). This joint venture was seen as the best and costeffective way to obtain substantial market share rapidly rather than greenfield investment, as addon deals and larger takeovers are anathema to Toyota. PSA and Toyota have split the investment costs and hope to generate healthy margins by pooling their expertise in engine and emissions technology. In this jointventure, Toyota will be responsible for the production while PSA Peugeot will be in charge of marketing. This project to Toyota is an important brandbuilding exercise to raise its current 4% of the European automobiles market. Impact of Toyota’s investment on the Czech Republic Toyota’s greenfield investment enables it to build its production system from scratch, thus allowing a full utilization of its technology. Toyota’s distinctive and highly efficient manufacturing technology of JustinTime system3 and 2 A nonToyoda in 45 years to hold this position. In 1999, Okuda moved to the chairman’s position. Norihiko Shirouzu. (The Wall Street Journal, 11 January 1999). 3 JustInTime concept refers to efficiency which provides parts as they are needed for the final assembly process (Kumon, 1998, p. 146). 352 Lim Jia Woon ‘Jidoka’4 leads to horizontal spillover to the local workforce by improving their productivity and vertical spillover to the consumers with a rise in the standard of product. PSA/Toyota’s Kolin car plant a