Share of foreign-capital firms in Polish economy sets new record in 2019

The share of companies with foreign capital in Poland reached a record 37.1 percent in 2019, according to analysis by the Polish Economic Institute.

The result was 0.5 percentage points (pps) higher than a year earlier, the institute (PIE) reported.

Citing annual data from the Central Statistical Office, PIE analysts described the increased share as widespread.

"The most growth occurred in the category of investment outlays - relative to a year earlier, up by 1.2 pps to 41.5 percent," the institute's analysts wrote in Thursday's edition of the PIE Economic Weekly, adding that the share of foreign-capital companies had also grown significantly in terms of: current assets (up by 0.6 pps), obligations (by 0.5 pps) and general income (0.4 pps), with increases also noted in the number of enterprises, people working, own capital, and fixed assets.

"Averaged on the basis of the above-mentioned categories, the synthetic index of the FFCs' (foreign capital companies) share in the economy reached a record-high level of 37.1 percent in 2019, 0.5 percentage points higher than in the previous year," PIE wrote.

Institute analysts also cited the PIE export questionnaire for 2020, which said "the different competitive advantages on international markets" of companies with Polish and foreign capital "may determine their future position in the Polish economy."

The main competitive advantages FCCs include having more competitive technology--both created in-company and brought in from outside--branding, protected patents and utility models as well as authorisations, concessions and certificates, PIE said.

"Another advantage of FCCs is a much higher degree of meeting investment needs - 82.6 percent of respondents in this group compared to 57.8 percent of PCCs (Polish capital companies - PAP)," PIE wrote. In the analysts' opinion, the competitive edge Polish capital companies have is a flexibility when it comes to changes in demand and adapting to buyer preferences.

They said the flexibility of PCCs may have mitigated the fallout of the first wave of the coronavirus pandemic, while FCCs could make use of a later strengthening in demand for durable consumer goods, including cars and their parts.

"The results of both groups of companies, and their position in the Polish economy, will probably depend on the course of the pandemic and (...) its impact on the global economy this year," PIE wrote.