The Effects of Foreign Direct Investment on Local Companies. Case : The Polish Construction Sector

Abstract: The entrance of Poland to the European Union (EU) will attract Multinational Enterprises (MNEs) to the country. These MNEs will invest in Poland and this will have its consequences for the local companies. The purpose of this dissertation is to investigate how these foreign investments will affect the local companies in the construction industry in Poland. To describe the influence of Foreign Direct Investment (FDI) to the Polish construction sector we divided the possible effects of FDI in: employment, competition, process innovation and resource-transfer effects. To collect primary data, we sent questionnaires and interviewed strategic managers of medium and large construction companies. The results indicate that companies in the construction sector expect to benefit from MNEs. The main problems in the construction sector are currently: a lack of financial resources, insufficient management skills and outdated equipment. The number of jobs in the sector is decreasing and the competition is fierce. In the short term, FDI will not be beneficial for all local companies in the sector. Many companies will have to implement new innovations or cooperate with other companies to stay in business. However, in the long term the construction sector will be more efficient and more productive. This dissertation contains a model, which has been created through literature, primary and secondary data and shows in detail how FDI will affect and be beneficial for the Polish construction sector.