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The Efficiency of Foreign Borrowing: The Case of Poland

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  • Prokop, Jacek
  • Baranowska-Prokop, Ewa

Abstract

The main objective of this paper is to examine the efficiency of foreign investment borrowing by Poland in the 1970s. That decade was of particular significance in the post-war history of Central and Eastern Europe. For the first time after the World War II, Poland – a major country in the socialist block – opened up to western economies by increasing foreign trade and by taking loans to finance the imports of modern technology and investments. Since there has been a major disagreement about the economic impact of the loans, we make an attempt to resolve this controversy. The considerations are conducted in a macroeconomic model. Based on the econometric analysis, we conclude that the efficiency of foreign investment borrowing was relatively high. It means that the policy of using external sources to finance economic growth was fully justified.

Suggested Citation

  • Prokop, Jacek & Baranowska-Prokop, Ewa, 2012. "The Efficiency of Foreign Borrowing: The Case of Poland," MPRA Paper 44976, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:44976
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    File URL: https://mpra.ub.uni-muenchen.de/44976/1/MPRA_paper_44976.pdf
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    References listed on IDEAS

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    1. Mamoru Kaneko & Jacek Prokop, 1993. "A game theoretical approach to the international debt overhang," Journal of Economics, Springer, vol. 58(1), pages 1-24, February.
    2. Göran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
    3. Jeffrey D. Sachs, 2002. "Resolving the Debt Crisis of Low-Income Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(1), pages 257-286.
    4. Siti Daud & Jan Podivinsky, 2011. "Debt–Growth Nexus: A Spatial Econometrics Approach for Developing Countries," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 18(1), pages 1-15, September.
    5. Presbitero, Andrea F., 2008. "The Debt-Growth Nexus in Poor Countries: A Reassessment," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-28.
    6. Prokop, Jacek, 1995. "Organized debt buybacks: No cure for free riding?," Journal of Development Economics, Elsevier, vol. 47(2), pages 481-496, August.
    7. Prokop, Jacek, 1992. "Duration of debt overhang with two lender banks," Economics Letters, Elsevier, vol. 38(4), pages 473-478, April.
    8. Jacek Prokop, 1998. "Dynamics of International Debt Overhang with Two Lender Banks," The Japanese Economic Review, Japanese Economic Association, vol. 49(2), pages 119-137, June.
    9. Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011. "External Debt and Growth," Review of Economics and Institutions, Università di Perugia, vol. 2(3).
    10. Spanos,Aris, 1986. "Statistical Foundations of Econometric Modelling," Cambridge Books, Cambridge University Press, number 9780521269124, March.
    11. Shuanglin Lin & Kim Sosin, 2001. "Foreign debt and economic growth," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(3), pages 635-655, November.
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    Cited by:

    1. Mehmet Behzat Ekinci, 2016. "External Borrowing and Inflation in Turkey Between 2003 and 2015: A Simple Linear Regression Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 45-54.

    More about this item

    Keywords

    foreign borrowing; efficiency of foreign debts; international indebtedness;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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