Countries bordering the EU are more attractive, owing to their stronger economies and faster transformation, as well as their geographic and cultural proximity. In the more stable Central European region, the choice of privatization method and speed of privatization sales have also been important. Fast sales of state-owned enterprises to the highest bidder allowed foreign investors to take a controlling position over most of the Hungarian manufacturing, financial, and retail sectors. Sales to foreigners were more selective in other countries, where voucher methods and leveraged sales to management dominated. FDI Sources Germany is the largest investor in Central Europe, followed by the United States.
Japan shows weak interest in the region.
Like the Republic of Korea, Japan is involved in a small number of large projects. U.S. investors prefer larger than average-size investments, with Poland the number one target. Austria has a prominent role in this region, with its proximity compensating for the country's small size. In tiny Slovenia, for instance, Austrian investors rank number one, surpassing U.S. and German investors. Austria also plays a major role in Slovakia.