Challenges of Firm's Internationalization: Polish Perspective

Abstract

This paper investigates the challenges faced by Polish firms during the internationalization process, emphasizing the unique historical, economic, and cultural context of Poland. The internationalization of businesses has become increasingly important for growth, competitiveness, and risk diversification, particularly for firms in emerging economies like Poland. The study, employing a mixed-methods research approach, is explorative and its results should be understood as the starting point for further studies. The main objective is to assess the scale of involvement of Polish companies in OFDI as well as to identify the main challenges encountered by Polish firms as they venture into international markets. Main findings of the paper reveal that Polish companies are at the early stage of internationalization – the scale of investment expansion of Polish companies is very low. The OFDI/GDP ratio places Poland third from last among all EU countries (including the so-called 'New' EU countries). Analyzed data from National Bank of Poland and Eurostat reveals a notable shift in the structure of stock OFDI in Poland between 2013 and 2021. While the total industry sector experienced growth in share, particularly in manufacturing, the total services sector witnessed a slight decline, despite remaining the largest aggregate. Key changes were observed in financial and insurance activities, wholesale and retail trade, and administrative and support service activities. The key challenges identified in the paper include access to finance, cultural and language barriers, acquiring market knowledge and establishing effective entry strategies, and also lack of network cooperation or good practices share that would help new players to enter foreign markets. That highlights the role of government and institutional support, in facilitating the internationalization process for Polish firms. The findings of this study offer insights for Polish firms, policymakers, and stakeholders, providing a better understanding of the challenges and opportunities in the internationalization process. Furthermore, this research contributes to the existing body of knowledge on the internationalization of firms from emerging economies and highlights potential avenues for future research in this area.