International investors leave almost half of their income in Polish companies, according to a report by Grant Thornton.
The past three decades have brought a strong influx of foreign investment into Poland. According to the most recent data from the National Bank of Poland, at the end of 2018 the capital invested by foreign entities in Poland – in the form of fixed assets, stocks or debt instruments – amounted to EUR 200 bn. To put it into perspective, this is about 40 per cent of Poland’s GDP and ten times more than the Polish capital invested abroad.
Yet, the incoming foreign investment may be of a varied “quality” – more or less effectively contributing to the development of the local economy. It may serve as a catalyst, bringing the economy to a higher level, but it may also (in extreme cases) actually halt growth. One of the ways to measure this effectiveness is by looking at reinvestment figures, i.e. how much of the profits generated by the enterprise, instead of going back into the foreign owner’s pocket, stays in the business and is again invested in its growth. The higher the reinvestment rate, the greater the benefit to the economy.
How willing are foreign businesses in Poland to reinvest?
Has there been a change in recent years?
What can be done to boost the reinvestment rate?
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