The Investment Development Path in the Context of Poland’s Accession to the European Union and the Global Financial and Economic Crisis

Abstract

The investment development path (IDP) was provided by Dunning (1981, 1986) as a framework for understanding the dynamic interaction between foreign direct investment (FDI) and the level of economic development of a given country (Dunning and Nar ula, 1996). It has been used in a range of theoretical and empirical studies across the world (see reviews by Boudier- Bensebaa, 2008; Narula and Dunning, 2010; Narula and Guimón, 2010). Basically, it assumes that the conditions for domestic and foreign companies change along with the change in the level of country development, thereby affecting the flows of inward and outward FDI. Inward flows interact with the upgrading of the country’s location advantages, while outward flows do so with the development of domestic firms’ ownership advantages. The difference between outward and inward FDI stocks constitutes the country’s net outward investment position (NOIP). The concept suggests that, as countries develop, they go through five distinct stages (Dunning, 1986; Dunning and Lundan, 2008). The most important stages from the point of view of this study are the third and fourth stages representing an innovation-driven economy and a knowledge-based economy, respectively.KeywordsEuropean UnionForeign Direct InvestmentGross Domestic ProductForeign Direct Investment InflowOutward Foreign Direct InvestmentThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.