What is it about?

In this exploratory study, die autfiors attempt to determine and interpret die interdependencies between die motives and modes of setting up subsidiaries by foreign investors in Poland, and the main characteristics and performance of these subsidiaries. Two modes of setting up a subsidiary are examined: green-field and acquisition. The audiors use data collected from seven foreign subsidiaries operating in Poland and apply within-case and cross-case analytical approach to identify and interpret relationships between die variables under consideration. The results of the study lead to a formulation of eight hypotheses requiring further testing and research.

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Why is it important?

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 this investment in the region. Coupled with a dynamic increase in foreign trade, FDI has led to a much greater openness of the Polish economy to the world and has facilitated Poland’s imminent accession to the European Union. FDI has also had a beneficial impact on the international competitiveness of Polish industries and firms.


Both within-case and cross-case analyses provide important insights into the ways the seven foreign affiliates were established and how they subsequently operated in the Polish market. The studied firms, although concentrated in one region of Poland, represented a broad spectrum of manufacturers, from clothing to medical instruments to glass making equipment. Three of them entered the Polish market through green-field investment and four through acquisition. Most of the investing firms were both market and efficiency seekers. No firm entered the market mainly to seek resources.

Marian Gorynia
Uniwersytet Ekonomiczny w Poznaniu

Read the Original

This page is a summary of: Motives and Modes of FDI, Firm Characteristics and Performance, Journal of Transnational Management, October 2005, Taylor & Francis,
DOI: 10.1300/j482v10n03_05.
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