Foreign direct investment and host country regional export performance: evidence from Poland

A prominent benefit attributed to the flow of foreign direct investment to developing
countries is its effect on international market access. Through a variety of channels the presence of foreign firms is expected to reduce the costs faced by domestic firms in breaking into
international markets and in turn boost their export prospects. To examine the validity of this
claim we use panel data from Poland’s manufacturing sector to investigate whether variation
in the export volume of domestic firms is related to the concentration of foreign firm export
activity. Our results are consistent with the notion of spillovers from foreign firms and suggest that domestic firms operating in regions-industries with a higher concentration of foreign
firm export activity enjoy higher export volumes.