evidence: With market development being a key motivation, not surprisingly much of the FDI inflows to the NMS went to larger economies. The three largest economies, Poland, Hungary and Czech Republic captured almost two-thirds of all FDI into the region (Figure 4). Overall, services sector dominated FDI inflows counting for two-thirds of total FDI stock in 2016. This is in line with the global trend where services sector counts for around 65 percent of total FDI stock (World Investment Report, 2016). Large inflows into services sector were driven by privatization, particularly of the financial sector, and, later on, development of trade, transport and communications sectors. Together, financial services and wholesale and retail trade account for over 40 percent of total FDI stock in the NMS. Over time, with large-scale offshoring by multinationals, the share of information technology and business (professional and administrative) services FDI has increased to reach 15 percent of total FDI stock as of 2016. In manufacturing, the lion’s share is counted for by automotive, metal, machinery and chemical sectors in line with the dominance of these industries in European manufacturing and exports (Veugelers, 2013 and Stehrer and others, 2016). [...] This section investigates determinants of FDI inflows. We start our analysis with panel gravity regressions of bilateral aggregate FDI inflows from 38 source countries into 19 host countries during 2001-14.4