Outward FDI from Poland and its Policy Context, 2012

During the transition toward a market economy, Poland’s outward foreign direct investment (OFDI) was small and limited to trade-supporting activities in key export markets for many years. It took off and started growing rapidly only from 2005, when the Polish private sector had matured enough to start generating home-grown multinational enterprises (MNEs). Some state-owned enterprises (SOEs) also began investing abroad, sometimes with the Government’s encouragement. In contrast, Poland adopted a laissez-faire policy toward private companies, leaving the emergence and expansion of private MNEs to market forces. In addition, Poland became a source and a transit country for large intra-corporate cross-border flows of funds within both foreign and Polish MNEs, classified as FDI flows, and inflating OFDI data. During the global economic turbulence of 2008–2011, Polish MNEs continued to invest abroad at quite elevated levels. Their profitability still depends to a considerable extent on the domestic market, and the Polish economy has performed well during the crisis and the subsequent economic slowdown in Europe.