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Post-Transition Investment Behavior in Poland; A Sectoral Panel Analysis


  • Zuzana Murgasova


Analyzing and projecting the behavior of macroeconomic variables in new EU member states presents special challenges, owing to limited time series of the available data. This paper presents an analysis of investment in Poland based on an underexplored sectoral data set. The determinants of investment are found to include lagged investment, lead production, relative unit labor costs, EU demand, corporate profitability, and greenfield FDI (foreign direct investment) inflows. Dynamic in-sample simulations indicate some overinvestment in 1997 compared with what the model would suggest, and a substantial underinvestment during 2000-2004. The model is then used to project future investment: while rapid investment growth is likely, it remains uncertain whether investment as a share of GDP will reach its peak levels on the late 1990s.

Suggested Citation

  • Zuzana Murgasova, 2005. "Post-Transition Investment Behavior in Poland; A Sectoral Panel Analysis," IMF Working Papers 05/184, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:05/184

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    References listed on IDEAS

    1. Rumen Dobrinsky, 2005. "Domestic Savings and the Driving Forces of Investment in the ECE Emerging Market Economies," ECE Discussion Papers Series 2005_2, UNECE.
    2. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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    Cited by:

    1. Bellak, Christian & Leibrecht, Markus & Riedl, Aleksandra, 2008. "Labour costs and FDI flows into Central and Eastern European Countries: A survey of the literature and empirical evidence," Structural Change and Economic Dynamics, Elsevier, vol. 19(1), pages 17-37, March.
    2. World Bank & International Monetary Fund, 2006. "Financial Sector Assessment Program Update : Republic of Poland - Competition and Performance in the Polish Second Pillar," World Bank Other Operational Studies 16052, The World Bank.


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