Foreign ownership versus financial liquidity and debts of enterprises in Poland

Abstract

In the environment of globalization and financialization of the economy, a distinct growth in the share of international investors in the ownership structures of enterprises in Poland has been observed. The problem of the impact of ownership structures involving international investors on the operation of enterprises in Poland is particularly important and valid. This study aims to analyze the relationship between foreign ownership and financial liquidity and debts of enterprises in Poland between 2012 and 2017. The methods use aggregated data of 8700 foreign enterprises and 42,000 domestic enterprises. In order to meet the objective of the study, the following research methods have been applied: a measurement of the volume of foreign ownership in the corporate sector and the measurement and a comparative analysis of financial liquidity and debts of foreign enterprises relative to domestic enterprises. It was found that foreign enterprises follow an increasingly aggressive strategy of financial liquidity management, and finance their business with debts to a higher extent than domestic enterprises. Foreign ownership has had a positive impact on optimization of the financial liquidity management strategy, the cash conversion cycle, and sources of funds for business. But this features a higher risk compared to domestic ownership.