Analysis of the Cobb-Douglas Production Function as a Tool to Investigate the Impact of FDI Net Inflows on Gross Domestic Product Value in Poland in the Period 1994–2012

Abstract

The purpose of this paper is to analyse the impact of foreign direct investments net inflows on changes in GDP value in Poland in the period between 1994 and 2012 with the use of the Cobb-Douglas production function. The paper consist of five parts. Parts I and II present some aspects of the FDI influence on economic growth from the theoretical and empirical point of view. Part III defines conditions indispensable for the positive FDI impact on the economy of the host country. Part IV outlines changes of FDI flows in Poland in the period of 1994-2012. Part V includes the main assumptions of the Cobb-Douglas production function and an estimate of changes in GDP value for Poland in the period 1994–2012 with the use of the VECM. The factors significant for economic growth are also identified, including the significance of the net FDI inflows. Eventually, the effect of gross fixed capital formation, employment, FDI net inflows, exports and R&D on changes in the GDP value are determined.

Regional spillover effect to Gross Regional Development Product (GRDP) in The Special Region of Yogyakarta, Indonesia

“…Additionally, it is also needed for having regulations that control capital flows between Asian countries so that investment conditions can support the entry of foreign capital because FDI is proven to have significant positive effect on real GDP growth of each countries studied. This research is also in accordance with the research result from Gaikwad & Fathipour (2013) in India, Kosztowniak (2014) in Poland, Sarfraz & Liu (2015) in Pakistan, Khan& Jehan (2015) in Pakistan, Kisswani et al (2015) in Estonia, and Mahembe & Odhiambo (2016) in SADC countries.…”

Investigating the Impact of Market Openness on Economic Growth for Poland: An Autoregressive Distributed Lag Bounds Testing Approach to Cointegration

“…In another study, Kosztowniak (2014) defines theoretically the aspects of foreign direct investment that affect economic growth in Poland. Then, she sets out the conditions that are essential in order to have a positive impact from the foreign direct investment in the host country.…”