The proposed project aims to study the effects of automotive foreign direct investment (FDI) on industrial upgrading and regional economic development in the Czech Republic and Slovakia. The research project is designed to deliver policy recommendations contributing to the effective implementation of the EU Cohesion and Regional Policies; and allows the principal investigator to develop a personal network for future international research collaboration dealing with the effects of FDI, the automotive industry and regional development in the context of the EU. The knowledge will be transferred to the host institution, Charles University in Prague, in the form of teaching, training and supervising both pre- and post-doctoral students. As the automotive industry has become a leading industrial sector in both countries, the research project studies its effects on national and regional economic development. The research particularly focuses upon the evaluation of FDI effects on industrial upgrading, development of supply linkages with local small and medium sized enterprises, and the transfer of knowledge from foreign-owned to domestic companies. The research project also aims to evaluate regional assets and advantages for the automotive industry and to what extent they fit the strategic needs of transnational corporations. The project uses an interdisciplinary approach as it draws on research traditions in three different disciplines: research on regional development and production networks in economic geography, research on FDI, automotive industry and spillover effects in economics, and research on global value chains and economic embeddedness in industrial sociology. The financial support to the proposed project will allow the re-integration of the highly experienced US-based researcher back to his home institution in the Czech Republic and thus will further support the competitiveness and attractiveness of the European Research Area.