Foreign Direct Investment in Real Estate and Related Business Services:Poland vs OECD Countries​

Krzysztof Olszewski,Marcin Humanicki

doi:10.33119/kkessip.2018.2.5

Abstract

Poland has experienced a relatively large inflow of foreign direct investment (FDI) in the last two decades. FDI has been flowing mainly into services and manufacturing similarly to the trend observed in global capital movement. Within the services, the financial intermediation played the biggest role in terms of attracting FDI, but real estate and related business activities (legal, accounting, auditing, tax, marketing, etc.) also saw a high inflow of foreign capital. The paper analyzes the evolution of inward FDI stock in Poland over the period 1998–2012 with a particular emphasis on real estate and related business activities. It also discusses how Poland differs in terms of sectoral decomposition in the services of inward FDI stock from other Organization for Economic Cooperation and Development (OECD) countries representing both Central and Eastern Europe (CEE) and advanced economies. Finally, the paper answers the question how Poland is performing relative to other OECD members in terms of FDI attractiveness.

Highlights

Foreign direct investment (FDI) has been long viewed as a desirable form of investment as it promotes economic growth through the physical capital accumulation and the transfer of knowledge and technology
As concerns FDI ows in real estate, a study[6] for 47 countries over the 2000 to 2009 period nds that economic growth, demographics and the urbanization processes are strong determinants
We analyse the data on inward FDI position from the online Organization for Economic Cooperation and Development (OECD) International Direct Investment Statistics database[16], compiled according to the 3 rd edition of the OECD Benchmark de nition of FDI. is database provides both long time series and the sectoral decomposition of FDI according to the International Standard Industrial Classi cation of All Economic Activities (Revision 3)[17]

Summary

Introduction

Foreign direct investment (FDI) has been long viewed as a desirable form of investment as it promotes economic growth through the physical capital accumulation and the transfer of knowledge and technology. E motivation for such an analysis is that since the transition to a market-based economy, Poland has wanted to emerge as a service-oriented and innovative economy and the availability of a modern o ce space was an important factor at that time. We want to see how much Poland di ers from the other OECD countries in terms of FDI ows to the service sector. To this aim we divide the OECD into two reference groups: emerging market economies from Central and Eastern Europe (the Czech Republic, Hungary, Slovakia) and advanced economies (France, Germany, the United Kingdom, the United States). Foreign Direct Investment in Real Estate and Related Business Services

Literature review

Analysis of the data

A synthetic measure of FDI performance for Poland and other OECD countries

Findings

Conclusion