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
DOI:
https://doi.org/10.12775/OeC.2014.032Keywords:
FDI, GDP, Cobb-Douglas production function, VECM modelAbstract
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.
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References
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Aizeman J., & Noy L. (2006). FDI and trade ? two way linkages?. Quarterly Review of Economics, 46(3).
Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S. (2004). FDI and economic growth, the role of local financial markets. Journal of International Economics, 64(1).
Alfaro, L., Chanda, A., Kalemli-Ozcan, S. & Sayek, S. (2006). How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages. NBER Working Paper No. 12522.
Balasubramanyam, V. N., Salisu, M., & Sapsford, D. (1999). Foreign direct investment as an engine of growth. Journal of International Trade and Economic, 8(1).
Barro, R. (1991). Economic growth in a cross section of countries. Quarterly Journal of Economics, 106(2).
Barthelemy, J. C. & Demurger, S. (2000). Foreign direct investment and economic growth: Theory and application to China. Review of Development Economics, 4(2).
Bieńkowski W., Weresa M. A., & Radło M.-J. (2010). Konkurencyjność Polski na tle zmian gospodarczych w krajach OECD. Warszawa: SGH.
Borensztein, E., Gregorio, J. & Lee, J. W. (1998). How does foreign direct investment affect economic growth?. Journal of International Economics, 45(1).
Campos, N. & Kinoshita, Y. (2002). Foreign direct investment as technology transferred: Some panel evidence from the transition economies. Manchester School, 70(3).
Cukrowski J., & Jakubiak, M. (2004). Znaczenie inwestycji zagranicznych i poprawa klimatu inwestycyjnego w Polsce. Warszawa: CASE.
de Mello, L. R. (1999). Foreign direct investment-led growth: Evidence from time series and panel data. Oxford Economic Papers, 51(1).
Dimelis S. P. & Papaioannou, S. K. (2010). FDI and ICT Effects on Productivity Growth: A Comparative Analysis of Developing and Developed Countries. European Journal of Development Research, 22(1).
Dollar, D. & Kraay, A. (2003). Institutions, trade and growth. Journal of Monetary Economics, 50(1).
Dollar, D. & Kraay, A. (2004). Trade, growth and poverty. Economic Journal 114(2).
Elahee, M. N. & Pagan, J. A. (1999). Foreign direct investment and economic growth in East Asia and Latin America. Journal of Emerging Markets, 4(1).
Gholami, R., Lee, T. & Heshmati, A. (2006). The causal relationship between information and communication technology and foreign direct investment. World Economy, 29(1).
Górecki, B. R. (2010). Ekonometria podstawy teorii i praktyki. Warszawa: Key Text.
Hansen, H. & Rand, J. (2006). On the causal links between FDI and growth in developing countries. World Economy, 29(1).
Haveman, J., Lei, V. & Netz, J. (2001). International integration and growth: A survey and empirical investigation. Review of Development Economics, 5(2).
Hejazi, W. & Safarian, A. (1999). Trade, foreign direct investment and R&D spillovers. Journal of International Business Studies, 30(3).
Hermes, N. & Lensink, R. (2003). Foreign direct investment, financial development and economic growth. Journal of Development Studies, 40(1).
Herzer D., Klasen, S. & Howak-Lehmann, F. (2008). In search of FDI-led growth in developing countries: the way forward. Economic Modeling, 25(5).
Karaszewski W., Jaworek M., Kuzel M., Szałucka M., Szóstek A., Długołęcka K. (2009). Foreign Direct Invesment of Polish Companies: its scale, structure, determinants, influence on the competitiveness. Toruń: Wydawnictwo Naukowe Uniwersytetu Mikołaja Kopernika.
Kinoshita, Y. (2000). R&D and Technology Spillovers via FDI: Innovation and Absorptive Capacity. Michigan, USA William Davidson Institute Working Paper No. 349.
Kłysik-Uryszek, A. (2010). Bezpośrednie inwestycje zagraniczne w gospodarce regionu. Teoria i praktyka. Warszawa: CeDeWu.
Kokko, A. (1994). Technology, market characteristics and spillovers. Journal of Development Economics, 43(2).
Kraszewski W., Sudoł S. (1997). Empirical research on the process of transformation of Polish companies in the period of 1990?1995. Toruń: Wydawnictwo Naukowe Uniwersytetu Mikołaja Kopernika.
Misztal, P. (2010). Foreign Direct Investments as a Factor for Economic Growth in Romania. Review of Economic and Business Studies, 5.
Misztal, P. (2012). Bezpośrednie inwestycje zagraniczne jako czynnik wzrostu gospodarczego w Polsce. PAN, Finanse, 1(5).
Molendowski, E. (2007). Liberalizacja wymiany handlowej krajów Europy Środkowowschodniej w okresie transformacji ze szczególnym uwzględnieniem doświadczeń krajów CEFTA, Kraków: UE w Krakowie.
OECD, (2014), OECDStat. Retrieved form http://www.oecd.org/statistics/.
Pangsy-Kania S. (2010). Inwestycje zagraniczne w Polsce w sektorach high-tech a perspektywiczne kierunki badań przy wykorzystaniu metodyki foresight. Problemy współczesnej gospodarki światowej, Prace i Materiały IHZ UG. 29/2010.
Petrović, E., & Stankowić, J. (2009). Country Risk and Effects of Foreign Direct Investment. Facta Universitatis, Series: Economics and Organization, 6(1).
Piłatowska, M., (2003). Modelowanie niestacjonarnych procesów ekonomicznych. Studium metodologiczne. Toruń: Wydawnictwo UMK.
Ram, R. & Zhang, K. (2002). Foreign direct investment and economic growth: Evidence from cross-country data for the 1990s. Economic Development and Cultural Change, 51(1).
Szczepkowska-Flis, A. (2006). Empiryczna analiza wpływu bezpośrednich inwestycji zagranicznych na wzrost gospodarczy w Polsce w latach 1996?2004. In: D. Kopycińska (Ed.). Problemy wzrostu gospodarczego we współczesnych gospodarkach. Szczecin: Wydawnictwo Pringroup.
UNCTAD (2014), UNCTADStat. Retrieved form http://unctadstat.unctad.org
Vehorn, C. L. & Vasarevic, A. (2011). FDI and Macroeconomic Policies,? Central and Eastern European Countries. Zagreb International Review of Economics & Business, 14(1).
Weresa, M. A. (2009). Innowacje jako źródło przewagi konkurencyjnej w gospodarce opartej na wiedzy. In: E. Mińśka-Struzik, T. Rynarzewski (Eds.). Szoki technologiczne w gospodarce światowej. Poznań: Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu.
Vintila, D., & Zaharia, R. (2012). Foreign Direct Investments and Economic Growth in Romania, 7th International Scientific Conference, Business and Management 2012, Vilnius Gediminas Technical University, Lithuania.
Witkowska, J. (2011). Rola kapitału zagranicznego w modernizacji gospodarki nowych krajów członkowskich Unii Europejskiej. Aspekty porównawcze. PTE, Zeszyty Naukowe, 9.
Zhang, K. (2001). Does foreign investment promotes economic growth? Evidence from East Asia and Latin America. Contemporary Economic Policy, 19(2).
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Published
31-12-2014
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Articles
How to Cite
Kosztowniak, A. (2014). 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. Oeconomia Copernicana, 5(4), 169-190. https://doi.org/10.12775/OeC.2014.032
