0001-6373/$20.00 © 2016 Akadémiai Kiadó, Budapest
Acta Oeconomica,Vol. 66 (2), pp. 307–332 (2016)
DOI: 10.1556/032.2016.66.2.6
VERIFICATION OF THE RELATIONSHIP BETWEEN
FDI AND GDP IN POLAND
Aneta KOSZTOWNIAK
(Received: 7 August 2014; revision received: 8 October 2014;
accepted: 13 May 2015)
ANETA KOSZTOWNIAK
The paper analyses the impact of the factors of production on economic growth in Poland in the
years 1992–2012, with particular focus on the impact of foreign direct investment (FDI), and
strives to verify whether a causality relationship occurred between GDP and FDI, i.e. whether high
GDP dynamics attracted FDI inflows and whether this investment contributed to GDP growth.
The Vector Error Correction Method impulse responses and variance decomposition analysis
confirmed the bi-directional relationships between FDI and GDP in Poland. However, the im-
pact of GDP on attracting FDI inflows to Poland is stronger than that of FDI on GDP growth.
Polish developmental policy should concentrate on three essential determinants (pillars) of
growth, namely employment growth, attracting FDI (with emphasis on improvement in the type
of inflowing investment), and increasing the value and productivity of domestic investment.
Keywords: FDI, GDP, Poland, bilateral causality, VECM, the response function, variance decom-
position
JEL classification indices: C50, C52, F41, F43, O11
Aneta Kosztowniak, Assistant Professor at the Faculty of Economics and Legal, Department of
Economic Policy and Banking, Kazimierz Pulaski University of Technology and Humanities in
Radom, Poland. E-mail: aneta.kosztowniak@wp.pl