The role of local government units in attracting FDI. The case of the Lodz Region

• Authors: Tomasz Dorozynski , Agnieszka Dorozynska , Wojciech Urbaniak
• Languages of publication: EN

Abstracts

EN

The article focuses on the activities of local government units (LGUs) in the Lodz voivodeship (Poland). More importantly, it compares the activities of local authorities in selected EU Member States of Central and Eastern Europe. Despite the fact, that foreign investors consider Central and Eastern Europe one area, the countries in the region differ significantly with respect to economic achievements, foreign direct investment (FDI) absorption capacity, and the approach to investment incentives. In the literature some studies tried to identify some non-economic determinants of foreign direct investment. A consistent modelling of foreign direct investment flows needs to take account of not only the traditional determinants enumerated in literature, but also variables linked to the institutional environment, in which such investment takes place. Carlo Altomonte (2000) showed that an efficient institutional framework is a crucial determinant of foreign direct investment. That is why it is worth assessing whether the activities of regional authorities may contribute to an increased investment attractiveness of a region in the eyes of foreign investors. The aim is to evaluate local government’s efforts undertaken to attract FDI in view of a comparative analysis for regions in three countries: Hungary, Poland and Romania, and a direct research involving representatives of all counties and 36% of communes in the voivodeship of Lodz . The article centres around four aspects. First, it presents comparative analysis for selected Central and Eastern Europe (CEE) regions and it reviews instruments used by the LGUs to attract FDIs. Then, it provides the evaluation of communes and counties’ preferences when it comes to attracting FDIs. The third analysed aspect is the impact of FDIs on local economies. Finally, we also identify impediments to the inflow of FDIs to communes and counties. The paper was prepared on the basis of the results of a questionnaire survey, the literature of the subject, analysis of national and EU legislation, regional data from the Central Statistical Office and other institutions.

Keywords

EN

Regional Development, FDI, Lodz Region

• Publisher: Prague Development Center, Czech Republic
• Journal: Business and Economic Horizons
• Year: 2014
• Volume: 10
• Issue: 4
• Pages: 281-304

Dates

published

2014-12-05

Contributors

author

Tomasz Dorozynski

author

Agnieszka Dorozynska

author

Wojciech Urbaniak

References

• Budnikowski, A., 2006. International economics. Warsaw: PWE
• Central and Eastern Europe Economic Scorecard - a sustainable future in a great region, Report PricewaterhouseCoopers 2013
• Checklist for foreign direct investment incentive policies. 2003. OECD, Paris
• Churchill, G., 2002. Marketing research: methodological foundations. Warsaw: PWN Publishing House
• Dunning, J., 1979. Explaining changing patterns of international production: In defense of the eclectic theory, Oxford Bulletin of Economic and Statistics, vol. 41, Issue 4: 269-295
• Dunning, J. and Lundan, S., 2008. Theories of foreign direct investment. In John H. Dunning and Sarianna M. Lundan (org.), Multinational Enterprises and the Global Economy, Cheltenham: Edward Elgar Publishing Limited, pp. 79-115
• Economic activities of entities with foreign capital in 2011, GUS, Warsaw 2012
• European Attractiveness Survey, 2013. Ernst &Young.
• European Competitiveness Report, 2012. Reaping the benefits of globalization. European Commision 2012
• Eurostat, 2014. Newsrelease: Regional GDP, STAT/14/29 27 February 2014
• Faeth, I., 2009. “Determinants of foreign direct investment - a tale of nine theoretical models”, Journal of Economic Surveys, 23 (1): 165-196, http://dx.doi.org/10.1111/j.1467-6419.2008.00560.x
• Ferguson George A., Takane Yoshio. 2004. Statistical analysis in psychology and pedagogy, Warsaw: PWN Publishing House
• Foreign direct investment in emerging market countries, 2003. Report of the Working Group of the Capital Market Consultative Group, International Monetary Fund, September 2003
• Freitag - Mika, Eliza. 2006. Foreign capital in Poland in the globalisation era. Radom: Technical University of Radom
• Gentry, B., 1999. FDI and the environment: Boon or bane? In FDI and the Environment, OECD. Paris, pp. 21-45
• Gorynia, M. (Ed.), 2005. Strategies applied by Polish companies vis-a-vis the expansion of foreign investors. Warsaw: PWE
• Godlewska-Majkowska, H. (Ed.), 2012. Investment attractiveness of the regions. Lodz Voivodeship. Warsaw: Centre of Regional and Local Analyses
• Harding, T. and Javorcik, B., 2011. Roll out the red carpet and they will come: Investment promotion and FDI inflows, The Economic Journal 121 (December),1445-1476
• Homlong, N. and Springler, E., 2010. Economic development and foreign direct investment: How to create sustainable development. An analysis of the potential for sustainable development on the indian subcontinent. PANOECONOMICUS, 3, pp. 333-347, http://dx.doi.org/10.2298/ PAN1003333H
• Hunya, G., 2014. Regional policy and FDI Location - an overview of the larger new EU member states, The Vienna Institute for International Economic Studies, Research Report 393
• Karaszewski, W. (Ed.), 2005. FDI in Kujawy-Pomerania region (state-of-play, importance for regional economy, factors motivating and demotivating the inflow), Scientific study. Torun
• Kłysik-Uryszek, A., 2010. Foreign direct investment in the region’s economy. Theory and practice. Warsaw: CeDeWu.Pl.
• Kokko, A., Gustavsson, P., 2004. Regional integration, foreign direct investment, and regional development. EIB papers, Vol.9, Iss1:110-135
• Kornecki, L., 2008. Foreign direct investment and macroeconomic changes in CEE integrating into the global market. Investment management and Financial Innovations, Volume 5, Isssue 4: 124-132
• Lipsey, R., Sjöholm, F., 2005. The impact of inward FDI on host countries: Why such different answers. In T.H. Moran, E. M. Graham, M. Blomström (eds.), Does Foreign Direct Investment Promote Development?, Washington: Institute for International Economics
• Ministry of Economy, 2010. Wartość inwestycji w SSE wg kraju pochodzenia. December 2010. Warsaw
• Morisset, J. and Pirnia, N., 2002. The impact of tax policy and incentives on FDI [in:] Foreign Direct Investment: Research Issues, Ed. by G. Bora, Routledge, London
• Nowicki, M. (Ed.), 2010. Investment attractiveness of the regions and the subregions of Poland 2010. Gdansk: Instytut Badań nad Gospodarką Rynkową
• Noworól, A. (Ed.), 2008. Foreign investment in Malopolska. Kraków: Marshal Office of Malopolska Region
• Orłowski, W., 2010. Economic growth in Central and Eastern Europe 1950-2030. Warsaw: PWE
• Pietrzyk, Irena. 2002. Polityka regionalna Unii Europejskiej i regiony w państwach członkowskich, Warsaw: PWN Publishing House
• World Investment Report, 2013. UNCTAD 2013
• Report on state aid in Poland granted to entrepreneurs in 2011, UOKiK, Warsaw 2012
• Różański, J., 2010. Multinational corporations in Poland. Growth, funding, assessment. Warsaw: PWE
• Rymarczyk, J., 2006. International economics. Warsaw: PWE
• Special Economic Zones, 2012. KPMG Report. 2012 Edition
• Statistical Yearbook of the Republic of Poland, 2012. Central Statistical Office, data as at 31 December 2011
• Stawicka, M., 2008. Poland’s investment attractiveness. Warsaw: CeDeWu.Pl
• Strzelecki, Z. (Ed.), 2008. Regional and local economy. Warsaw: PWN
• Study on FDI and regional development, 2006. Final report, Copenhagen Economics in cooperation with Prof. M. Blomstrom, Copenhagen Economics 2006
• Treaty on the functioning of the European Union, 2008, Official Journal of the European Union, C115/47
• Świerkocki, J., 2004. The overview of international economics. Warsaw: PWE
• Świerkocki, J. (Ed.). 2011. Foreign direct investment. The case of Lodz Region. Lodz: Science Society of Lodz
• Tondl, G. and Vuksic, G., 2008. What helps regions in Eastern Europe catch up? The role of foreign investment, human capital and geography, [in:] Regional Economic Policy in Europe, ed. by U. Stierle-von Schulz, M.H. Stierle, F.B. Jennings, Jr. and A.T.H. Kuah, Edward Elgar, Cheltenham
• Wdowicka, M., 2005. FDI in Poznan agglomeration in the times of systemic transformation. Poznan: Bogucki Wydawnictwo Naukowe
• World Investment Report, 2013. Global value chains: Investment and trade for development, United Nations Conference on Trade and Development, United Nations, New York and Geneva
• World Trade Report, 2006. Exploring the links between subsidies, trade and the WTO, WTO, Geneva
• Wysokińska, Z. and Witkowska, J., 2004. International trade and sustainable development, Lodz: Publishing House of the University of Lodz

Identifiers

DOI

http://dx.doi.org/10.15208/beh.2014.23