Foreign Direct Investment and Integration into Global Production and Distribution Networks: The Case of Poland

28 Pages Posted: 20 Apr 2016

See all articles by Bartlomiej Kaminski

Bartlomiej Kaminski

University of Maryland

Beata Smarzynska Javorcik

University of Oxford - Department of Economics; World Bank - Development Research Group (DECRG); Centre for Economic Policy Research (CEPR)

Date Written: July 17, 2001

Abstract

Integration into the production and marketing arrangements of multinational corporations may offer many benefits to transition economies that, after a long period of isolation, have liberalized trade and investment. The fragmentation of production offers a unique opportunity for producers in developing countries to move from servicing small local markets to supplying large firms abroad and, indirectly, their customers all over the world.

Not until the end of the twentieth century, the "second globalization," has the ratio of trade to GDP been comparable to that during the first globalization, which took place at the end of the nineteenth century and was interrupted by World War I. Technological progress has increased the importance of the international division of labor and of global production and distribution networks. Multinational corporations have been a driving force behind these developments. As a transition economy, Poland provides an interesting case for study, as its sudden opening to foreign investment after a long period of isolation allows the process of integration into global networks to be studied more clearly.

Using Poland as a case study, Kaminski and Smarzynska study multinational corporations' role in integrating a host country into the increasingly international division of labor. They provide evidence that inflows of foreign direct investment are increasing Poland's participation in global production and distribution networks. They conclude that because of the large volume of foreign direct investment inflows expected in Poland in the near future, Poland's exports - driven by fragmented production - will continue to expand at even faster rates than observed there recently.

This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to study the effects of foreign direct investment on economic activity.

Suggested Citation

Kaminski, Bartlomiej and Javorcik, Beata Smarzynska, Foreign Direct Investment and Integration into Global Production and Distribution Networks: The Case of Poland (July 17, 2001). World Bank Policy Research Working Paper No. 2646. Available at SSRN: https://ssrn.com/abstract=632714

Bartlomiej Kaminski (Contact Author)

University of Maryland ( email )

College Park
College Park, MD 20742
United States

Beata Smarzynska Javorcik

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford
United Kingdom

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-8485 (Phone)
202-522-1159 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/bjavorcik

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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