Increasing role of foreign capital in Polish economy since 1993

Konrad Pawlik ()
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Konrad Pawlik: Department of Organisation and Management, Aarhus School of Business, Postal: The Aarhus School of Business, Fuglesangs Allé 4, 8210 Aarhus V, Denmark, http://www.asb.dk/staff/mib/kpa.aspx?page=%7B3A48694C-019A-4823-A4B9-3B58781541DD%7D

No 2005-4, Working Papers from University of Aarhus, Aarhus School of Business, Department of Management

Abstract: The regional integration and increasing role of the Central European Countries in globalization

processes raised the question of foreign direct investments inflow and its role in these Economies.

Poland, the first country that launched radical reforms and the largest country that joined recently

the European Union, pays special attention of the researchers in international economics and

business. This paper is introductory article opening up dissertation on technology transfer and

absorption to foreign affiliates in Poland in the years: 1993-2002. The paper carries out an analysis

of foreign companies and its role in different industries with regard to ownership control,

performance, and technology: transfer, absorption and complexity. The entire results are aggregated

and confronted in the comparative analysis with domestic private- and public- companies. The results

confirm significant increase of foreign control over their affiliates as well as the Polish market in

general. This implies larger amount of new greenfield investments that are mostly wholly owned

subsidiaries as well as using knowledge based view or transaction cost argumentation that there is

increasing transfer of tacit knowledge. Foreign companies invest more and implement more advanced

technical solutions than their domestic counterparts. Labour productivity and compensation per

employee are higher in foreign companies than in domestic firms, suggesting that employees in

foreign affiliates are more efficient, improving and absorbing new skills. Trends for profitability are

similar for domestic private companies, however foreign companies have the profits trend line flatter.

Foreign and intra-industry affiliates trade figures suggest growth in both aspects. The results

presented in this paper have clear policy implications for targeting of promotion activities to attract

FDI into Transition economies. Moreover, the paper open up the research ”box” for more profound

econometrical analysis that will be continued in the incoming dissertational articles.

Keywords: Foreign capital; FDI; Polish Economy; technology; R&D activity; innovation (search for similar items in EconPapers)
Pages: 70 pages
Date: 2005-09-02
New Economics Papers: this item is included in nep-eec and nep-tra
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