Foreign Direct Investment from Asia-Pacific Countries in Poland

Abstract

Theoretical background: The internationalization of the world economy has been progressing for decades. One of its elements is foreign direct investment (FDI), which can accelerate economic growth, additionally acting as a channel for technology transfer. According to the World Investment Report 2024 published by UNCTAD, among twenty countries and territories with the largest outflow of FDI in 2023, six came from Asia-Pacific: China, Hong Kong SAR (China), Japan, Republic of Korea, Taiwan (Province of China), and Singapore. In this context, the question arises whether FDI from Asia-Pacific countries flows to Poland on an equally large scale.

Purpose of the article: The aim of this study is to analyze the investments from the Asia-Pacific region in Poland – to determine their value and industry structure, as well as geographical location.

Research methods: The study uses an analytical-descriptive method to analyze investment processes and a comparative method to compare the value and industry structure of FDI located in Poland from Asia-Pacific countries. Data collected by UNCTAD, and the Amadeus (Moody’s) database, which collects financial statements of companies registered in Poland, were used.

Main findings: While the yearly value of the world FDI flows has been stagnant for about 2 decades, the countries of East and Southeast Asia have become the leading region of FDI outflow, with 42,7% share in 2020-23. In such conditions, attracting Asian investors can change Poland’s situation in terms of capital inflow and enrich the Polish economy with modern technologies. Meanwhile, the FDI from Asia-Pacific countries in Poland is of small value. It constitutes less than 7% of the total foreign capital stock invested. Around 75% of these investments are ventures undertaken by Korean and Japanese investors. Investments from China, Singapore, Hong Kong (SAR, China), and Taiwan are of marginal importance (less than 1% of all FDI in Poland). Only a few Korean investors – LG, SK Innovation and Samsung – invest in Poland in areas considered to be modern types of activity: manufacturing of batteries and accumulators for electric cars or establishing R&D centres. Other entrepreneurs from Asia-Pacific, even if they use modern technologies, invest in traditional industries. Finally, investors from Asia-Pacific countries invest their capital in Poland primarily in the manufacturing sector, not in services. As for the share of services among the top ten types of FDI activities, the only significant contribution is in case of Singapore: 81.5%. In case of China, the share of services is 26.8%, in case of South Korea: 18.2%, and for Japan: 0%. As this is the opposite of current trends in the world, it may negatively affect the value of investments directed to Poland from Asia-Pacific.