An institutionalist analysis of foreign investment in Poland: Wroclaw's second great transformation

Abstract

This thesis examines the reintegration of localities in Poland through foreign investment in general and transnational corporations, in particular. The focus of the research is on the relationships and interplay between incoming foreign firms, the corporate strategy of individual companies and the role of institutions and local actors. The region which is the focus of the empirical work is Wroclaw, which is located in the South West of Poland, and regarded as a relatively successful example of transformation. The analytical framework is radical institutionalist in emphasising the socially and politically embedded nature of economic behaviour and the existence of differentiated interests and power. Four dimension of embeddedness, structural, cultural, cognitive and institutional are used to examine how far and in what ways recent changes in the corporate strategy of firms have influenced the nature of firms' quantitative and qualitative linkages in the locality. The main conclusions are that although the multiplier effects through supplier linkages were modest, a process of cumulative causation was evident through the demonstration effect of incoming firms and the stimulation of a range of business services. Ambiguous and embryonic structures of local governance Wroclaw meant that foreign investors were significant contributors to the building of formal institutions. The research findings emphasise the use of enabling myths by foreign investors in attempting to instill a set of values, beliefs and expectations viewed to be congruent with a market economy, in both the locality and the workplace, while displacing or circumventing what were regarded as the inappropriate institutional legacies of the previous regime. The overall conclusion is that there needs to be a radical break with the free market status quo and that change can only come from below in the workplaces and local communities through participatory systems of local governance.