The influence of foreign investors on the development of Polish enterprises – a case study of the BPH bank

Abstract

According to the definition proposed by the Organisation for Economic Cooperation and Development (OECD), foreign direct investment means investment that causes long-lasting relationships. In turn, the latter reflect an interest of an economic entity of one country in an economic entity of a country other than the country of permanent residency of the direct investor. Foreign investors do not only provide production capital in privatized companies, but most of all technical know-how and the know-how on the performed economic activity. They send their specialists who should introduce international standards in daughter companies smoothly and eliminate the previous insufficient level of performance. Due to specific “spreading” of imported know-how the effect of boosted performance also affects domestic enterprises which have not been privatized yet. In this paper, the author will demonstrate the impact of a foreign investor on the development of Bank Przemysłowo-Handlowy in Cracow. A literature review will be used for this purpose, i.e. transaction documentation and post-audit statements of the Supreme Audit Office and delegations of the Ministry of State Treasury. The picture of how Hypovereinsbank has influenced the operation of BPH after the acquisition of shares will be presented as an outcome of this review. It is, thereby, a good example of denying the popular opinion about exploitation of local employees by foreign companies.