Abstract
The objective of this paper is to shed light on the understudied phenomenon of expansion of Polish firms to distant markets. Authors ask the following questions: (1) What is the current state of internationalisation of Polish firms in Latin America, in both quantitative (i.e. value of exports and FDI) and qualitative terms (i.e. characteristics of key exporters and investors); (2) What are the main distance-related barriers to internationalisation of Polish firms in Latin America. In order to describe the scale, scope and characteristics of Polish exports and investments in Latin America, authors analyse publicly available information, macro-level data and micro-level data, collected from the press and finan- cial statements of Polish firms present in Latin America, combined with the information received from the Trade and Investment Promotion Sections of the Polish Embassies. In order to assess the distance between Poland and Latin America, thus indicating the major barriers to internationalisation of Polish firms in this region, the psychic distance measures elaborated by Hakanson and Ambos and the CAGE framework offered by Ghemawat are employed. This paper contributes to the discussion on whether the ‘go global’ strategy is viable for Polish firms and whether it should be supported by the State.
Highlights
Polish firms typically start their internationalisation process, and continue their expansion, in the markets proximate to Poland[1]
This paper aims at addressing this research gap, by focusing on the activities of Polish firms in one of the ‘distant’ regions, that is Latin America
In order to assess the distance between Poland and Latin America, indicating the major barriers to internationalisation of Polish firms in this region, we employ the psychic distance measures elaborated by Hakanson and Ambos[66] and a framework offered by Ghemawat[67]
Summary
Polish firms typically start their internationalisation process, and continue their expansion, in the markets proximate to Poland[1]. The geographical structure of Polish trade and foreign direct investment (FDI) is not diversified. In 2015, 89% of Polish exports went to Europe and Central Asia, with top ten trading partners (i.e. Germany, Czech Republic, UK, France, Italy, Netherlands, Russian Federation, Sweden, Spain and Hungary) accounting for 66% of Polish exports[2]. Europe accounted for 88% of Polish outward FDI stock in 2015. The main recipients of Polish outward FDI in 2015 were Cyprus, Luxembourg, Czech Republic, Netherlands and Switzerland, except for Czech Republic, these investments typically were not productionor sales-oriented. In terms of the number of investment projects (both greenfield and M&A), the most popular destinations of Polish ventures abroad are Germany, Lithuania, Czech Republic and UK3. In 2014, 61.4% of foreign subsidiaries of Polish firms were located in the European Union (EU)[4]
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