Outward foreign direct investment (OFDI) from Hungary has been increasing since 1997. Until that year, the value of Hungarian investment abroad had been insignificant. Since then, Hungary has become one of the main investors in the CEE region. The quantity and geographical and sectoral distribution of outward investment are heavily influenced by large single projects, which can dominate the annual figures. Apart from the official data, the analysis in this paper was based on a questionnaire survey. The 22 companies that responded represented hardly 2 per cent of the Hungarian companies that have invested abroad, but their investments there amounted to 52 per cent of the total capital placement from Hungary. Thus it covered the large, important investors, who were mainly 'old', traditional, domestically controlled companies that were relatively well capitalized.

Neighbouring countries were clearly favoured by Hungarian investors. Apart from those established in offshore areas, most affiliates of Hungarian companies in the EU or other regions were set up for sales and trading products, while most Hungarian affiliates in the CEE region were production companies. Concerning the market entry modes and forms, acquisition of foreign firms is somewhat more popular than greenfield investment. Hungarian companies prefer 100 per cent ownership. The dominant legal form of the affiliates is a limited company. The main motive for establishing affiliates abroad proved to be the acquisition and expansion of market share and strategic considerations. According to respondents, such expectations were realized, and market share, exports and production increased. Effects on employment at the parent company were rather neutral.

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