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Capital Accumulation in a Region. Cooperatives Versus Foreign Direct Investments

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  • Zimnoch Krystyna

    (Faculty of Management, Bialystok University of Technology, Poland)

Abstract

The main aim of this article is to demonstrate the ability of cooperatives to create internal resources of a region through foreign direct investments and the creation of financial, physical, human, and social capital. It concerns the comparing and emphasizing of the stability of resources created in a region by these forms of action. In order to demonstrate the stability of internal resources of a region, generated through foreign direct investment, a research was conducted involving the analysis of the rankings of the largest foreign investors in Poland, statistical data from the Central Statistical Office and the NBP, showing the inflow and outflow of FDIs, the number of companies with foreign capital participation, and the number of people working in them. In addition, a case study was used for the regions where the investments have been withdrawn, showing the importance of cooperatives for the stabilization of the potential of the regions. The study shows that the transfer of FDIs is always guided by the maximization of profit, tax optimization of a location, and the native currency exchange rate fluctuations. The following consequences of withdrawal have no significance to foreign investors but affect the regions: the increase in the unemployment rate, the reduction in the income of local residents, the increase in debt, the acquisition of real estate purchased on credit. The case study shows that cooperative enterprises can replace foreign capital in the region, ensuring the stability and durability of its internal resources. The concepts and strategies for regional development should focus on cooperatives as a way to create the internal resources of a region, which are seen as the current development source. Co-operatives can prevent the leaching of resources and backwash effects. The economic policy must ensure the equal treatment of all of the entities investing in the region. Currently, Poland gives the priority to foreign investors over the domestic ones. Cooperative enterprises are particularly discriminated against through double taxation. It is worthwhile to examine the scale of the cooperative movement in the economy of the EU and the US and the policy instruments applied to this form of business in those areas.

Suggested Citation

  • Zimnoch Krystyna, 2016. "Capital Accumulation in a Region. Cooperatives Versus Foreign Direct Investments," Engineering Management in Production and Services, Sciendo, vol. 8(3), pages 15-24, September.
    • Handle: RePEc:vrs:ecoman:v:8:y:2016:i:3:p:15-24:n:2
    DOI: 10.1515/emj-2016-0020
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    References listed on IDEAS

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    1. Buckley, Peter J., 2009. "The impact of the global factory on economic development," Journal of World Business, Elsevier, vol. 44(2), pages 131-143, April.
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