Advances in Economics and Business Vol. 1(2), pp. 203 - 212
DOI: 10.13189/aeb.2013.010215
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Foreign Direct Investment as a Factor of Economic Growth in Poland. Empirical Analysis for the Period 1995-2012


Aneta Kosztowniak*
Faculty of Economics, Radom University of Technology and Humanities, 26-600 Radom, Poland

ABSTRACT

The main purpose of this paper is to analyse significance of the production factors on economic growth in Poland in the years 1995-2012, with particular attention given to the influence of foreign direct investments (FDI). The analysis was carried out with the use of the Cobb-Douglas production function. This paper describes two models. The first, basic model of the economic growth for Poland consists of four variables and the second - augmented model - consists of six independent variables. The research conducted in Poland reveals that in the period 1995-2012 a linear correlation existed between the FDI inflow and growth (Pearson’s coefficient R = 0.8317), however, according to a model estimated with the use of the CLS method, FDI was not a significant factor determining GDP growth. The really significant factors were gross domestic expenditure on fixed capital and expenditure on R&D. The augmented version of the Cobb-Douglas function model for the years 1995-2012 estimated by means of the CLS method demonstrates that the only significant factor was government spending at 5% significance level. The remaining variables were insignificant.

KEYWORDS
Foreign Direct Investment, Economic Growth, Cobb-Douglas Production Function, Poland, CEE countries

Cite this paper
Aneta Kosztowniak . "Foreign Direct Investment as a Factor of Economic Growth in Poland. Empirical Analysis for the Period 1995-2012." Advances in Economics and Business 1.2 (2013) 203 - 212. doi: 10.13189/aeb.2013.010215.