1. Introduction Globalization process has completely changed the problem of capital availability in contemporary economy. It has brought diverse consequences for development of all economies. Global financial of the years 2008-2010 has proved that under some unfavorable conditions capital flows and international financial interconnections between countries can lead to serious destabilization of their real economies (Thalassinos, 2008). Even though the had started in highly developed countries and had touched them very hard, in many cases the real crisis victims were the developing economies. On the other hand, globalization and the availability of international capital can be a source of great opportunity for developing countries. First of all, developing economics can benefit from foreign capital. Foreign investment, especially foreign direct investment (FDI) can help in upgrading technological level of their economies, thus it can help to benefit from convergence process and to modernize a country. It is often believed that FDI can help to solve many serious economic and social problems. For example, it is commonly stated that FDI usually bring strong positive results for labour market of a beneficiary as it results in decreasing the level of unemployment. As a result in case of political process and political decision making this argument is very often used as justification for significant government direct financial support for international investors that plan their investments in a given country. Transnational corporation often directly influence government policy to lobby for a more favorable policy mix in the area of regulations, taxation or other form of direct and indirect support by utilizing their influence as potential large employers (see more: Whyman, 2006). Thus, the question about relations between foreign direct investment and unemployment makes very important and interesting scientific problem for en economist. It is also crucial for forming development policies. The aim of this paper is to investigate interrelationships among FDI and unemployment in Poland in the years 1995-2009. The organization of the paper is as follows: the fallowing section gives some theory and literature review of international researches for highly developed and developing countries. The second section has strictly empirical character with short explanation of methodology and presentation of VAR model. Finally the paper ends up with concluding remarks. 2. Theoretical background and literature review The influence of FDI on labour markets conditions has been extensively studied in recent years. These studies have had strictly theoretical but also empirical character. However, there are still many controversies on interrelations between FDI inflow and employment. Different theoretical models and empirical investigations for different countries or periods show often inconsistent results. This discussion and controversies signal that the effects of FDI on labour markets can change from one country to another. These effects can depend on the country features and specific forms of investment. For example in principle, it is accepted that positive employment effects are usually much higher if the FDI has the form of greenfield project. On the other hand when the foreign capital inflow takes the form of buyouts of privatized enterprises, it usually can have minor or even negative influence on employment (Hisarciklilar et all, 2009, p. 9) Among strictly theoretical works in the field one can point at work of Fung et all, where a three sector endogenous growth model is used to investigate effects of foreign direct investment on the dynamics of urban unemployment, labour and capital income and national welfare in Harris-Todaro economy. This model shows very complicated interrelations between destination of foreign direct investment, intersectoral mobility of capital, elastisities of substitution, factor investments of final good production, growth rate and welfare effects (Fung et all, 1999, pp. …
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