When in Poland... Effects of foreign direct investments on corruption in Poland

Abstract: Corruption has been around for centuries. Cross-border direct investments just for decades. Recent empirical research has found, that countries with rising corruption witness a decline in foreign direct investments. Poland is a paradox in this matter as both corruption and foreign investments are rising. This paper tries to find an answer to that question through examining the relationship between these phenomena in Poland. The findings suggest, that corruption, at least in the case of Poland, could be also understood as a transfer of culture. Most major foreign investors come from economies or cultures, where corruption has been recognized, and even promoted, for years. Thus, based on theoretical literature, published surveys and numerous interviews with experts and practitioners, I conclude, that foreign investors have not only went along with corrupt activities in Poland but they could also be seen as contributing to the sustained levels of corruption. The paper explains that phenomena through a model, that combines the quality of foreign investments, the number of companies using it and the level of corruption in Poland. Increasing the share of investments with high technological sophistication can contribute to the fight against corruption in Poland