Externalities of Direct Foreign Investments

The issue of externalities generated by the foreign direct investments (FDI) is widely discussed in world literature. Alongside analyses of national economies of the host countries a great deal of attention is focused on the strategies of domestic companies that are confronted with the results of activities pursued by foreign investors. The article contains a synthetic examination of literature dwelling on external effects of FDI, mainly from the standpoint of domestic firms and organizations. The authors present the results of their empirical study, conducted in 2004, that was centered on the external effects of activities of foreign investors in Poland. During the study the attention was directed toward the strategies of domestic firms attempting to adjust their behavior to the conditions that result when foreign investors invade the Polish market.