Impact of the Financial Structure of FDI Inflows on Economic Growth in Poland
Impact of the Financial Structure of FDI Inflows on Economic Growth in Poland
Author(s): Aneta KosztowniakSubject(s): National Economy, Economic policy, International relations/trade, Economic development, Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets
Published by: Instytut Nauk Ekonomicznych Polskiej Akademii Nauk
Keywords: foreign direct investment (FDI); reinvestment of earnings; GDP; VECM model;
Summary/Abstract: The aim of this paper is to analyse the impact of financial components of foreign direct investment (FDI) inflows on economic growth in Poland in the years 2004–2018, with special emphasis on the role of reinvestment of earnings. The following hypothesis has been put forward: As FDI inflows into Poland and enters the successive stages of its profitability life cycle, impact of equity on economic growth decreases, while the importance of reinvestment of earnings rises. In order to verify the hypothesis, the VECM model was used, supplemented with an extended reaction analysis. The research results confirm that among FDI components, mainly equities and reinvestment of earnings have a significant impact on GDP changes. In the short term, the inflow of equity has the most important impact on economic growth. In the long-time, the importance of equity decreases, while the importance of reinvestment of earnings rises.
Journal: Ekonomista
- Issue Year: 2019
- Issue No: 5
- Page Range: 542-571
- Page Count: 30
- Language: English
