Geographical breakdown of Polish OFDI – explanatory potential of Uppsala model

Last decade proved that internationalization becomes the more and more important growth strategy for Polish companies. The paper attempts to find whether they choose to invest abroad in line with the framework of Uppsala model, i.e.: start to establish foreign entities in one or a few neighbouring countries rather than on distant markets and precede production relocation by establishing trade units. The research provide evidence that Polish firms prefer this conservative model of internationalization. Up to 2011 almost 85% of all foreign entities were based in Europe while over a half of them (and slightly more than 60% of industrial companies) were located in the immediate neighbourhood (Germany, the Czech Republic, Slovakia, Ukraine, Belarus, Lithuania, and Russia). Moreover, the highest turnover was also recorded in the closest markets (especially Germany and the Czech Republic). The analysis also shows that in general, the share of manufacturing entities was dominated by trade firms.