Foreign Direct Investment in cohesion to employment - case of Poland

Abstract: This Thesis Work has examined the FDI effects on employment in the case of Poland. The main objective is proving how foreign capital inflows affect on job creation and recent unemployment rate (from 1991-2007) in different economic sectors. Valuable foundation has been discovered that indicate the consistent movement between foreign capital inflows and employment/unemployment in the years observed. FDI were hoisting from year to year, but the unemployment rate still remains on high level. It is irrevocable fact that other neighboring countries have better utilized the foreign capital inflows in propitiating the unemployment especially among the young workers. The case of Poland was interesting to be inquired just because of high foreign investment but also high unemployment rate that in 2003 has exceed 20%. Theoretical and empirical examinations have shown plain influence of Foreign Direct Investment on employment creation in Polish economy during transition and after EU membership. From analytical approach we have ascertained the positive impact that FDI have on performance of domestic industry in terms of export, import and GDP and labor productivity as well. Analytical findings attested that without domestic investment calibration as well as domestic firm evolvement cannot be expected foreign enterprises to contrive full employment among the labor force. Minimizing unemployment requires undertaking various actions and establishing priorities. There are some propounds on how unemployment can be reduced in the case of Poland. Some economic areas are unfledged and Government should polarize it efforts to adopt more foreign capital in those areas to support better utilization and by that reducing the unemployment. This Thesis Work has dissected the FDI effects on employment/unemployment in Poland due period of communist independence until EU membership and indicated whether they were successful or not. Sizeable increase in employment has been registered and is giving signal for even better results in foreseeable future. However when confronting with other economies from the former communist bloc, Poland still remains as country with highest unemployment rate in EU. When analyzing other CEE experience with FDI in terms of cutting unemployment and favor employment, overall judgment is that FDI were not as much successful or better say utilized in Poland. Nevertheless we can confirm the FIEs role in improving employment structure and decline in unemployment rate among workable population. However surveys show better FDI harvest on employment in other neighboring countries then in Poland. The final inference is that the Polish economy was not in readiness to utilize FDI influence when it comes to labor market condition.