The geography of foreign direct investment in Poland's food industry

In this paper a gravity model is developed to analyse cumulative FDI inflows into Poland's food industry during the 1990s. The FDI data is related to characteristics of 28 countries of investor-origin. The results confirmed earlier studies with respect to important links between FDI, trade, and labour costs, as well as the general appropriateness of the basic gravity model formulation. Geographical distance was found to be a significant determinant of FDI in staple food industries, but not in high value-added, branded confectionery, beverage, and tobacco production, suggesting that different industry-branches might be globalised to a differing extent.