Direct Investment In Poland Research Articles

Determinants of FDI Stock in Some Central European Countries

Given the importance of foreign direct investment (FDI) in the economy, the purpose of this study is to identify and investigate the economic indicators that can explain the development of FDI in the economies of Central and Eastern European countries such as the Czech Republic, Poland, Hungary, and Slovenia throughout the period 1995–2020. When developing multiple linear regression models, the following explanatory variables were considered: exports, imports, import concentration and diversification indices, the balance of trade, the balance of payments, and different components of the economic freedom index. Therefore, it was shown that a rise in exports and imports has a beneficial impact on enhancing the flow of foreign direct investment (FDI) in each of the nations examined for this study. Furthermore, an increase in the value of the import diversification index is shown to have a beneficial effect on the levels of foreign direct investment (FDI) in the Czech Republic, Hungary, and Slovenia, as determined by this study. On the other hand, the import concentration index has been shown to benefit foreign direct investment in Poland. Furthermore, it was discovered that the balance of payments was a positive factor in the Hungarian economy. In contrast, the trade balance was shown to be a positive element in Poland and Slovenia. Both indicators have positively impacted foreign direct investment (FDI) flow.

Chinese FDI in Poland and the Czech Republic – inflows, determinants and challenges

Purpose: The objective of this paper is to present Chinese investment flows and the nature of participation, to analyze the differences between host countries, and to identify the determinants of Chinese FDI in Poland and the Czech Republic. Design/methodology/approach: Comparison of the specifics of Chinese direct investments in Poland and the Czech Republic. Findings: The nature of Chinese investment in Europe is changing. After years of being dominated by mergers and acquisitions, Chinese investment in Europe is now more focused on greenfield projects. In 2021, greenfield investments reached €3.3 billion, the highest ever recorded, and accounted for nearly one- third of all Chinese FDI. More recently, the volume of Chinese FDI in Europe has reached the level of European FDI in China (now constrained by restrictions and risks). It matched the level of FDI by Chinese companies in the United States before declining over the past two years, generally due to Covid-19 and the war in Ukraine. Chinese economic presence in Europe can be divided into three areas based on size, destination, and type of acquisition: The core of Europe is formed by the three major target countries (Germany, UK, France), where more capital-intensive investments are made, followed by other Western European countries (EU-15). The new member states (NMS), which joined the EU in 2004, 2007 and 2013, as well as the Western Balkan countries in the process of accession, are associated with China in the 16+1 format (with the exception of Kosovo) and form another gateway to Europe. Due to fewer market opportunities, they receive less direct investment, but China is building infrastructure (ports, highways, railroads) - segments of the Silk Road that will bring Chinese products to mature EU markets (Richtet, 2019). It is unlikely that Chinese investment in Europe will recover in 2023. The Chinese government is expected to maintain strict capital controls, financial retrenchment, and Covid-19 restrictions. The war in Ukraine and the expansion of regulations to monitor and control Chinese investments in the EU and the UK will cause additional difficulties. Originality/value: The article could be an attempt to answer the question of combining macroeconomic and institutional factors to better understand the internationalization of firms (Dunning, Lundan, 2008). There is no doubt, that the Covid-19 pandemic and the war in Ukraine made it necessary to deepen the study of the phenomenon of FDI, its inflows, determinants, and related challenges in a turbulent world. Keywords: foreign direct investments (FDI), People's Republic of China, Czech Republic, Poland, international relationships. Category of the paper: Research paper.

Foreign Direct Investments in Poland against Countries of Visegrad Group

In the period of scarcity of investment capital, foreign direct investment (FDI) is an important source of its acquisition. These investments flow to the host countries in various conditions and consequences for the economy. The concept of linking the country’s position in terms of inflow and outflow of foreign direct investments with its economic development is the concept of the investment and development path – IDP (The Investment Development Path). The article diagnoses changes in the value of foreign direct investment in Poland against economies of Visegrad Group in 1995-2020, taking into account the effects of the pandemic on changes in FDI flows in 2016-2021. Against this background, the development of the Polish economy was diagnosed in the light of the path theory (IDP). The analysis covers the years 1995-2020 and 2016-2021 and uses data from UNCTAD and the World Bank. In the periods selected for the analysis, one can notice definitely different dynamics of changes in the value of FDI liabilities. The reaction of foreign investors in selected location markets varied during the pandemic. The diversification of the cumulative value of FDI receivables for individual countries is significant. During the pandemic, investors reacted to the situation in different ways. Among the selected countries, an increase in the value of FDI undertaken abroad was recorded in Slovakia and the Czech Republic. Polish investors and investors from Hungary made investments with lower values than in 2020. In all years, NOIP for Poland takes negative values, so the level of FDI undertaken in Poland exceeds the level of investments undertaken abroad. Identifying the transition to one of the most important stages on the IDP path – stage III is difficult. It is debatable to determine the period in which Poland entered such a stage. This results, among others, from low FDI. It is indicated that this is a period from 2004 to even 2013.

DOES THE SHADOW ECONOMY AFFECT FOREIGN DIRECT INVESTMENT? CASE STUDY OF POLAND AND POLISH REGIONS

The main goal of the research was to identify the relationship between the level of shadow economy and Foreign Direct Investment. The research was carried in Poland and Polish regions during 1990-2020. MIMIC approach was employed to calculate the level of shadow economy as a % of Polish and regional GDP. Pearson correlation index and Kolmogrov-Smirnov test were applied as well. The study proved there is a sound negative correlation (-0,636) between the shadow economy and foreign direct investment in Poland, but regional associations between those two variables demonstrated different results. Unlike in other Polish provinces, in Opolskie and Podkarpackie the correlation index confirmed a positive association between the level of shadow economy and FDI flow.

Evolution of the Motives for Foreign Direct Investments in Poland between 1990 and 2018

Purpose: The main purpose of this study is to identify and evaluate changes in the motivation for making foreign direct investments in Poland between 1990 and 2018. Design/Methodology/Approach: The study was divided into two stages. The first stage covered the period from 1990 to 2008, for which our analysis of the motivation behind FDI in Poland was based on results of studies completed by other authors. The second research stage involved analyses based on our direct survey research conducted according to the CAWI method among 1,965 companies which started economic activity in Poland between 2009 and 2018. The research was conducted using a poll approach and a questionnaire designed by the research authors. Findings: The review of the studies conducted by other researchers suggests that the motives for undertaking FDI in Poland are relatively stable. The key reasons, both in 1990-2008 and 2008-2018, were motives connected with business efficiency (cost-related), market and resources. Significantly, factors within the categories of motives which determine investors’ decisions underwent certain modifications over the time period analysed. Practical Implication: Because of their impact on the socio-economic dimension of economy, foreign direct investments have been the subject of research for many years, in an effort to identify the reasons why FDI are made. Exploring the motives and factors which determine the location of FDI in a given country could provide the information necessary to design a policy whose aim is to shape the volume and structure of foreign direct investments. The goal is to achieve desired economic effects. Originality/Value: The social and economic development is determined by well prospering enterprises, including those with foreign capital. It is still necessary to conduct studies in the FDI motives and determinants area in the aspect of forming their value, especially in view of the fact that the current interest in this situation is still very important

Permanent establishment as a foreign direct investment in Poland: identification of tax barriers in the context of new tax development

Abstract The paper aims to identify the significant tax barriers to foreign direct investment (FDI) in Poland, in particular in the form of a permanent establishment (PE), in the context of new developments in international tax law. Due to the recommendations of the Base Erosion and Profit Shifting (BEPS) project, launched by Organisation for Economic Co-operation and Development (OECD) to prevent international tax avoidance, the understanding of PE has changed, which could lead to changes in business models. The purpose of the research is also to identify the significant tax barriers to economic activity in Poland, in particular in the form of PE, against the international tax law context. The study conducted by the authors relies on the most current tax rulings and judgments of administrative courts issued between 2017 and 2020. It is concluded that not so much the effective tax burdens but the regulatory ambiguity surrounding the tax obligations may contribute to the reduction of Poland's attractiveness as a location for FDI.

Foreign Direct Investment in Poland and Changes in the Branch Structure

Purpose: The aim of the work is to present changes in the inflow of foreign direct investments (FDI) to Poland, taking into account the structure of the industry. An additional goal is also to indicate the variation in the inflow of capital to industries with a specific degree of technological advancement. Design/Methodology/Approach: The analysis covered the years 2005-2017 to capture, among others the impact of the economic crisis. The analysis for the indicated period was based on data from the National Bank of Poland. Findings: The value of the foreign direct investments flow to Poland varied in 2005-2017. The value of FDI flows in 2008-2010 was similar to that recorded in the years 2014-2016. Three sectors appear to be dominant in cumulative value industrial processing (38.1%), wholesale and retail trade (19.6%) and financial and insurance services (11.7%). The value of foreign capital flow in 2005-2017 into particular types of business activities changed in both absolute and relative terms. The aggregated value of liabilities due to FDI in the sector of high and medium-high tech tended to rise up to a point where it was higher in 2017 than the value in the low-tech sector. Practical Implications: The results of the research indicate which sectors attract foreign capital the most and to what extent the inflow of capital to a given country reflects the behavior of investors on the global market. Originality/Value: The study confirms the need to monitor FDI in individual sectors. It is possible, based on forecasts of changes in the economic situation in the world, to predict the behavior of investors in individual markets.

Determinants of foreign direct investment from OECD countries in Poland

In the last two decades, Poland became an important recipient of foreign direct investment most of which comes from the developed West European countries. This study uses panel data analysis to empirically examine the determinants of multinational activity of firms from the OECD member states in Poland during the period 1996–2015. The model’s estimated empirical specification is based on the modified knowledge-capital model of the multinational enterprise that includes two types of capital: human and physical. Our empirical evidence points to the vertical motive as the primary reason for undertaking foreign direct investment in Poland by multinational firms based in the OECD member states.

What attracts multinational enterprises from the new EU member states to Poland?

The main goal of this study is to examine empirically the determinants of multinational activity of firms from the new EU-12 member states in Poland during the period 1990–2014 using the negative binomial model. In particular, we test the predictions of competing theoretical models of the multinational enterprise to identify the investment motives for undertaking foreign direct investment in Poland. In addition to traditional country-pair characteristics such as absolute and relative market size and differences in relative factor endowments, in this study we account for cultural differences between the host and partner countries that may affect the cost of foreign investment. The assembled empirical evidence points to both market access and efficiency seeking as the main reasons for undertaking foreign direct investment in Poland by multinational enterprises based in the new EU-12 member states. However, cultural proximity does not seem to be an important factor in explaining the extent of multinational activity in Poland.

Vertical Industry Linkages and the Location of Foreign Direct Investment in Poland

We study the determinants of locational choice for new foreign affiliates across Polish regions with special focus on the role of agglomeration externalities using a conditional logit framework and firm-level data from the Amadeus database and a Polish dataset on regional and industry-region characteristics at the NUTS 2 level. The estimation results show that higher local demand agglomeration increases the probability that a foreign parent company founds an affiliate in a certain Polish region, whereas adverse labor market conditions, which manifest themselves in high unemployment and low wage rates, negatively affect the location probability.

Regional diversification of the inflow of foreign direct investment in Poland – an empirical analysis

Regional diversification of the inflow of foreign direct investment in Poland – an empirical analysis

Foreign direct investment of the European Union in Poland

The development of the European Union is the issue of the greatest interest for different countries. The article examines the positive and negative effects of EU foreign direct investment in Poland, the historical aspects of this issue and future perspectives. The article reflects with the complex results of the integration on the example of the accession of Poland to the EU. Poland's potential successes after accession are explored, such as economic growth, social development and political improvements. The environmental concerns, ethnic issues and other specific features of Polish domestic products are also discussed. The aspects of migration and unemployment, FDI investments in Poland before and after EU accession, social, economic, political and other concerns are in focus of this research. The article underlines that as a result of Poland joining EU, there is a need to advance Polish political and social concerns to have an option of choice for the country either to join or not to join EU. The problems of Poland development in the context of cooperation with EU and potential advancements of their mutual benefits are discussed.

Tax incentives as a main factor to attract foreign direct investments in Poland

Tax incentives as a main factor to attract foreign direct investments in Poland

Local determinants of foreign direct investment in Poland: the role of relative distance

Research background: The increasing role of foreign direct investments (FDI) in global, national, regional, and local economies draws the public?s attention to the criteria utilised by foreign investors in undertaking locational decisions, owing to the mostly stimulating character of these kinds of investments. 
 Purpose of the article: The aim of the article is to identify the local determinants of FDI distribution. Particular attention is put on the role of distance to: (i) various transport endowments; (ii) next special economic zone; (iii) different national borders, among other motives studied in empirical papers.
 Methods: An important value added over the existing studies is the use of continuous variables representing distances (in km) to selected points of interest (e.g., airport) or minimum distances to lines (i.e., border, road) instead of dummy variables indicating whether particular infrastructure endowment is present in a region. The estimations were run in STATA 14.2 software with the use of a negative binomial approach.
 Findings & Value added: The results present new empirical evidence on FDI determinants witnessed at a local level of analysis (LAU 1), fitting into the other research done at a higher level of data aggregation (NUTS 2, NUTS 3), signalling high intra-regional inequalities and the role of: (i) relative distance to various infrastructure endowments; (ii) heterogeneous border effects; and (iii) the importance of close proximity to special economic zones. Given the presence of counties? auto selection process (i.e., better developed, endowed, urbanised, favourably located) done by FDI investors, we formulate universal implications in terms of FDI promotion policy.

Determinants of MNE Activity in Poland: The Case of Firms from EU-15

Objective : The main purpose of this paper is to validate empirically the theoretical predictions of the modified knowledge capital model of multinational enterprise and identify the main reasons for undertaking international production in Poland by foreign firms from the EU-15 countries. Research Design & Methods : Our theoretical framework refers to the physical capital augmented knowledge capital model that combines both horizontal and vertical reasons for foreign direct investment. The empirical implementation of the theoretical framework is based on the negative binomial model and the bilateral dataset covering 15 old EU member states over the period 1989-2014 which yields a total of 390 observations. Findings: Our estimation results indicate that the extent of multinational activity in Poland is positively related to both differences in relative factor endowments and similarity in the relative country size which confirms the importance of both reasons for undertaking foreign direct investment in Poland. Implications & Recommendations: The empirical evidence confirms the predictions of the modified knowledge capital model and points to the horizontal as well as vertical motives for undertaking foreign direct investment in Poland. These findings suggest that government should not try to attract only one type of FDI. Contribution & Value Added: The originality of this work lies in the empirical implementation of the theoretical framework that allows distinguishing between horizontal and vertical reasons for foreign direct investment.

Foreign Direct Investment in Poland and Vietnam: A Compare Analyses

Foreign direct investment is the key driver for both Poland and Vietnam’s economic development in recent years. By the end of 2015, FDI sector in Vietnam comprised for 25% total investment, 14.46% of state budget revenue, with total FDI inward stock of nearly 103.8 billion USD. In Poland, FDI sector according to the UNCTAD 2016 World Investment Report, saw a 40% decrease in the FDI influx (USD 7.5 billion in 2015), after having entered the top 20 host economies in terms of FDI inflows in 2014. FDI inflows to Poland reflect the international economic situation as well as the economic slowdown in the EU following the Eurozone crisis of 2012–2013. This paper analyzes some main features of FDI in Poland and Vietnam during the period 2003–2015, finds out some similarities and differences between FDI flows in the two countries.

Direct foreign investments in food industry and their conditions

The article presents the formation of foreign direct investment in Poland and in the world. Based on a query of literature it has been built empirical part, through which can be made the diagnosis of inflows and outflows of foreign direct investment in Poland and foreign direct investment in the form of a greenfield in the world. With the included data on foreign greenfield investment is clearly visible the dominant position of East and South - East Asia. In the study was also presented the cumulative level of investment in Poland and Polish investment abroad through which can be seen, that Poland is country which adopts much more foreign capital, than investing abroad itself. Research has shown that the main regions attractive for foreign investors in the food industry are voivodeships: Wielkopolskie, Mazowieckie, Dolnośląskie, Łodzkie i Opolskie. In their area located manufacturing plants over 30 leading international food manufacturers.

The Regional Variation of Foreign Direct Investment in Poland

In this paper, an analysis of foreign direct investment in terms of regional differences was conducted. The analysis covered the period 2005-2013. The analysis shows that the distribution of investors in Poland is varied regionally. Regions particularly attractive for foreign investors were Mazovia, Silesia, Lower Silesia and Greater Poland. In contrast, Lublin Province, Podlasie Province, Warmia-Masuria Province are regions where foreign investors are the least.

The Response of MNCs to Radical Systemic Change in a Transition Environment

After the collapse of the communist system, multinational corporations (MNCs) embarked on direct investments in Poland and launched export operations through their subsidiaries at astonishing speed, in spite of the initially weak institutional environment. These developments challenge the explanatory power of institutional theories explaining the patterns of MNC expansion into Central and Eastern Europe after 1989. We propose an alternative theoretical framework based on a stream of organizational research that focuses specifically on strategic responses to radical changes in external operating environments. The analysis is based on a dataset covering 4,000 subsidiaries operating in the Polish manufacturing sector during the transition period 1989–2003.

Foreign direct investment and the volume of trade: the case of Poland

In this paper we study empirically the relationship between the volume of trade and foreign direct investment in Poland using the FDI augmented gravity equation derived from the modified Chamberlin–Heckscher–Ohlin model with multinational firms and complete specialization in production. We find that FDI contributes positively to the development of international trade between Poland and OECD countries, although the complete specialization C–H–O model with multinational firms does not find support in the data. In contrast, it seems that incomplete specialization H–O model better explains Poland’s trade with the OECD countries. The lack of support for the complete specialization model suggests that the vertical model of the multinational firm may not be appropriate for explaining trade and FDI patterns between Poland and the OECD countries. Therefore, other than labor cost reduction motives might explain the expansion of multinational firms’ activity in Poland. In the light of provided empirical evidence the fears of relocation of labor intensive assembly plants from the west to the east may not be fully justified.