Foreign direct investment outflow as a determinant of exports from Central and Eastern Europe – evidence from Poland
Foreign direct investment outflow as a determinant of exports from Central and Eastern Europe – evidence from Poland

Summary/Abstract: For Poland, as well as for other Central and Eastern European countries, export is an important factor for economic development. Particular importance of exports in these countries is attributed to FDI inflows. However, both theory and empirical research indicate that FDI outflows (even though their values are smaller than the values of inflows) may also affect exports from these countries. After 2004 there was a sharp increase in Polish investments in Europe, which was also the main destination of Polish exports, raising the question of how this would affect exports. The purpose of this paper is to prove that FDI outflow affects exports more than its inflow. Granger causality test was used to examine the causality between the accumulated FDI flows and exports in selected manufacturing industries. The study showed that FDI outflow was determining exports in three industries, whereas FDI inflow was dictating exports in two industries. Additionally, there was causality from FDI outflow to exports at the macroeconomic level and from exports to FDI inflow at the sector level (manufacturing). The conclusion is that more emphasis should be put on examining the consequences of FDI outflow from the countries of Central and Eastern Europe.

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