The Discourse and Realities of Offshore Business Services to Kraków

Abstract

This paper examines the scale and the scope of foreign-owned subsidiaries' local impact measured mainly by multiplier effects. Criticizing the political economy of offshoring from a host country perspective and the notion of “cathedrals in the desert”, the authors attempt to compare and contrast the perceived effects with the real contribution of foreign direct investment in business process outsourcing and shared service centres in Kraków. The empirical research is based on an in-depth research project looking at qualitative and quantitative impacts of foreign-owned subsidiaries on the local economy of Kraków. It draws on extensive primary and secondary data, including financial and employment data, press releases, interviews and an employee survey. The paper draws the conclusion that discourses presented by policy-makers, business organizations and companies differ significantly from the real local impacts and multiplier effects.