Increasing role of foreign capital in Polish economy since 1993
The regional integration and increasing role of the Central European Countries in globalization <p> processes raised the question of foreign direct investments inflow and its role in these Economies. <p> Poland, the first country that launched radical reforms and the largest country that joined recently <p> the European Union, pays special attention of the researchers in international economics and <p> business. This paper is introductory article opening up dissertation on technology transfer and <p> absorption to foreign affiliates in Poland in the years: 1993-2002. The paper carries out an analysis <p> of foreign companies and its role in different industries with regard to ownership control, <p> performance, and technology: transfer, absorption and complexity. The entire results are aggregated <p> and confronted in the comparative analysis with domestic private- and public- companies. The results <p> confirm significant increase of foreign control over their affiliates as well as the Polish market in <p> general. This implies larger amount of new greenfield investments that are mostly wholly owned <p> subsidiaries as well as using knowledge based view or transaction cost argumentation that there is <p> increasing transfer of tacit knowledge. Foreign companies invest more and implement more advanced <p> technical solutions than their domestic counterparts. Labour productivity and compensation per <p> employee are higher in foreign companies than in domestic firms, suggesting that employees in <p> foreign affiliates are more efficient, improving and absorbing new skills. Trends for profitability are <p> similar for domestic private companies, however foreign companies have the profits trend line flatter. <p> Foreign and intra-industry affiliates trade figures suggest growth in both aspects. The results <p> presented in this paper have clear policy implications for targeting of promotion activities to attract <p> FDI into Transition economies. Moreover, the paper open up the research ”box” for more profound <p> econometrical analysis that will be continued in the incoming dissertational articles.