Polish FDI in Germany – junior partner with any signs of rising strong?

Abstract

The economic ties between neighbours are always in the spotlight. Polish-German relations are no exception in this regard, especially given a particularly pronounced asymmetry in the level of mutual direct investment – the flows and stocks of foreign direct investments (FDI). This paper aims threefold: to analyse the recent development trends of Polish investment in Germany, to characterise the profile of investing firms and identify possible patterns of Polish FDI in Germany and finally, based on the diagnosed challenges, to formulate some policy and managerial recommendations. Methodologically it draws on a descriptive analysis of investment figures and a qualitative approach in line with the grounded theory method (GTM) framed in classic FDI theories and concepts. Confrontation of previously (2012-2014) conducted projects with the recent reports or scholarly studies confirmed challenges identified earlier and demonstrated that not much has changed in this respect. Poland when it comes to outward foreign direct investment (OFDI) is still ‘punching below its weight’. Such reflection could be interpreted ambiguously. On the one hand, Polish investments in Germany fluctuate considerably often subject to single one-time investment decisions; on the other, more investments target promising niche sectors such as IT or urban mining. The still unsatisfactory levels of Polish OFDI (development along the investment development path - IDP) can be hence explained ‘pessimistically’ in terms of missing structural competitiveness but also more on a positive note, as a result of the unabating potential and absorptive capacity of the domestic market.