Integration into Global Production and Distribution Networks through FDI: The Case of Poland

Abstract

Technological progress has led to increasing importance of the international division of labour organized around global production and distribution networks. Multinational corporations have been a driving force behind these developments. This article studies the role of MNCs in integrating a host country into the international system of division of labour in the context of Poland. It provides evidence of Poland's increasing participation in global production and distribution networks that is taking place through FDI inflows. It concludes that, thanks to a large volume of FDI inflows, Poland's exports driven by production fragmentation will continue to expand at even faster rates than those observed in recent years.

Productivity Convergence : Is Anyone Catching Up?

“…In Poland, industrial complexity was high even before joining the Club 1 convergence cluster. However, integration into European supply chains, particularly with Germany, enabled a larger export market and facilitated quality upgrading of Polish automobile and electronic goods production (Baldwin and Lopez-Gonzalez, 2015;Kaminski and Smarzynska, 2001). Polish firms that were foreign-owned or export-focused were found to be significantly more productive than their domestically-owned or focused counterparts as markets became more liberalized from the mid-1990s (Hagemejer and Kolasa, 2011).…”

Impacts of horizontal and vertical foreign investment in business services: the experience of Hungary, Slovakia and the Czech Republic

“…The contribution of this research needs to be understood in the context of two competing claims as to how the economies of post-communist NMS might fit into the emerging international division of labour. The first view is that these economies will benefit from the fragmentation of the value chains of large transnational corporations (TNCs), which will enable them to upgrade on the basis of high levels of human capital and technical capacity (Kaminski and Smarzynska, 2001). A less sanguine view is that they are tentatively linked by a few outposts of foreign capital and integrated only marginally into western production systems and minimally into innovation systems (Martin, 1998).…”

Sources of productivity differentials in manufacturing in post-transition urban South-East Europe

“…All of these activities should lead to higher efficiency of foreign-owned firms in SEE, while the effects on other local firms do not necessarily have to be positive. Early evidence from Central and Eastern European (CEE) economies has revealed that with the advent of multinational firms, there has been some integration of local firms into global production networks, but these effects have been limited to their subsidiaries (Kaminski and Smarzynska, 2001). Zukowska-Gagelmann (2000) and Hamar (2001) report on the emergence of a two-tier economy in Poland and Hungary, where enterprises that have received FDI dominate the economy, while local enterprises only try to catch up.…”