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Do foreign direct investment and savings promote economic growth in Poland?

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  • Soylu Özgür Bayram

    (Kocaeli University, Umuttepe Campus, Faculty of Economics and Administrative Sciences, 41001, Izmit, Turkey)

Abstract

This study aims to investigate the impact of savings and foreign direct investment on economic growth in Poland. Savings play an important role in achieving sustainable growth. High saving rates are also an important tool to increase resilience to financial shocks. The economic climate that emerged following the financial crisis revealed problems with the economy of Poland to obtain foreign financing. The decrease in foreign direct investment has led to an unpredictable economic environment for developing countries such as Poland. The decrease in foreign direct investment has led to lower growth rates for an emerging market such as the economy of Poland. The relationship economic growth rate, saving and foreign direct investment are examined for Poland over the period 1992-2016 by using the Autoregressive Distributed Lag (ARDL) bounds testing approach. According to this approach there is a cointegration relationship between the series and a 1% increase in savings which leads to a 0.81% increase on economic growth rate. Also a 1% increase in foreign direct investment (FDI) leads to a 1.52% increase in the economic growth rate.

Suggested Citation

  • Soylu Özgür Bayram, 2019. "Do foreign direct investment and savings promote economic growth in Poland?," Economics and Business Review, Sciendo, vol. 5(4), pages 3-22, December.
    • Handle: RePEc:vrs:ecobur:v:5:y:2019:i:4:p:3-22:n:1
    DOI: 10.18559/ebr.2019.4.1
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    More about this item

    Keywords

    economic growth; savings rate; foreign direct investment; ARDL bound testing;
    All these keywords.

    JEL classification:

    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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