Poland and Its IDP

What is it about?

This paper attempts to explore the concept of an investment development path (IDP) and its key component, the net outward investment position, as applied to Poland, treated here as a transitional economy. The point of departure for data analysis is the beginning of Poland's transition to a market-based system in 1990. The paper analyzes the available macroeconomic data identifying the IDP path for Poland and formulating the reasons for, and consequences of, the country's current IDP position. The role of government regulations and policies affecting foreign direct investment (FDI) is also investigated. Poland is at the end of the second stage of its IDP and behind the position that its gross domestic product would justify. This is mainly due to the pull of the large internal market, the still weak competitiveness of domestic firms in international markets, and government reluctance to adopt more active, firm-specific ownership advantage stimulating policies toward outward FDI.

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