Investing in a Transition Economy

Foreign direct investment (FDI) has played a pivotal role in the transformation of post-communist economies of Central and Eastern Europe (CEE) for more than a decade. This is especially true for Poland which experienced a phenomenal growth of inward FDI and had, by the year 2000, become the largest recipient of inward investment in the region. Inward FDI can be without doubt considered a salient factor contributing to Poland’s transition to a market-led system and, at the same time, leading to a wider and deeper involvement in the ever more complex process of globalization. The results observed and documented so far point to one dominant conclusion that although foreign investors in Poland have often been subject to criticism from Poland’s authorities, as well as domestic business circles and other professional, political and social groups, it is clear that the net effects of FDI have been impressive, both in magnitude and scope, and overwhelmingly beneficial to Poland and the international competitiveness of Polish industries and firms. Coupled with a dynamic increase in foreign trade, FDI has not only led to a much greater openness of the Polish economy to the world but has also facilitated Poland’s accession to the European Union.