adjust Project

The euro adoption and competitiveness of the Polish enterprises on international markets

 was financed by 

the National Science Centre, 

to which we are very grateful.

Grant no. DEC- 2011/03/D/HS4/01954;


The project objectives were focused on three groups of issues.


Firstly, to identify competitiveness factors, where competitiveness was understood as the internationalization capability of economies and enterprises.

Secondly, to assess the impact of the euro introduction on trade and direct investment as experienced by the euro area countries ("euro effect"). 

Thirdly, to assess the role of exchange rate risk and exchange rate level  for internationalization and competitiveness of Polish enterprises as well as the expectations regarding the euro impact on their operations.


Scientific results

Firstly, the knowledge about the euro effect and impact on internationalization of economies has been deepened.

Secondly, previous results on the euro effect demonstrating that this effect may vary and fade over time, be sensitive to the adopted estimation method and diversely distributed across countries, sectors and enterprises have been confirmed and expanded.

Thirdly, greater insight has been gained into the mechanisms of the euro functioning in terms of changes in the export structure and flows of foreign direct investments stimulated by the EU effect and the euro effect.

Fourthly, potential channels of the euro impact on the decisions of export companies have been identified.

Fifthly, the evolution of trade theory towards the microeconomic approach close to the approach of management sciences has been presented.

Research cooperation

A considerable team of 10 research workers and graduates with diverse experience and knowledge, coming from 5 Polish scientific institutions (University of Warsaw; University of Lodz; Institute for Market, Consumption and Business Cycles Research; Wrocław University of Economics), was set up.

An important added value of the large project team was the opportunity to confront varied methodological and operational approaches to formulated and performed research tasks in the project. The team plans to continue the research topic of competitiveness, internationalization, innovation and monetary integration.


A unique database of over 900 Polish industrial enterprises employing over 10 workers was created. Collected data allow the research to be repeated and continued and a time series to be built in order to deepen analyses in the discussed areas. The sample of 960 enterprises constitutes about 3.5–4% of the total population of companies (in the category of industrial enterprises employing more than 10 workers).

The key research tool was a survey adapted to Polish conditions with the consent of Bruegel think tank that made available the questionnaire used in the EFIGE project (European Firms in a Global Economy;

We complemented the EFIGE survey with our own unique questions concerning the perceived impact of exchange rate risk and the euro introduction on internationalization of Polish enterprises, perceived benefits and costs of the euro adoption, the effect on individual aspects of companies, etc.

The use of data from the prepared database of enterprises is in line with the trend of explaining internationalization and competitiveness by observing the characteristics of enterprises that are heterogeneous in many respects, which is consistent with the so-called "new" new trade theory and new economic geography.

The research carried out for the purposes of the project supplements the literature on international trade theories, management theories, internationalization models and competitiveness factors of enterprises and economies as well as analyses of the euro introduction effects at the micro- and macroeconomic levels.


The "euro effect" in the euro area countries

Based on the experience of the euro area countries with outward foreign direct investments, the importance of traditional factors triggering the FDI flow, such as the size of economy, geographic and cultural distance between countries and the “EU effect” (entry into the European Union), was corroborated. The euro effect was confirmed, yet it is marginal, may vary and fade over time, and may be sensitive to the adopted estimation method (Brzozowski M., Tchorek G., 2017)[1]. While in the field of foreign trade (exports and imports) the euro effect may have occurred already before the euro was formally adopted, that is when currencies participated in the ERM (1996–1998), the euro effect on capital export as FDI was most powerful in the years of accelerating globalization and financial integration (2003–2005).

The results of the above observations correspond to the conclusions from the search of the euro effect by means of export intensity indices (Barteczko and Tchorek, 2016)[2]. The possible euro effect was confirmed in relations between the monetary union members in initial years of the single currency (till 2001), as was the “euro effect” in trade with countries outside the monetary union after 2001 and 2002. The effect of trade creation outside the euro area may result from the fact that the euro serves as the second international currency. The euro, which contributed to globalization as more and more popular (inter)national money, stimulated openness.

Examining the euro influence on companies’ export decisions based on the experiences of the euro area countries (Tchorek, 2015 and Tchorek, 2017)[3], we can distinguish the following potential channels:

  • the new exporters channel, where new companies decide to start export activities, encouraged by lower transaction costs and reduced exchange rate risk;
  • the new markets channel, where existing exporters expand their activities to new geographical markets;
  • the product variety channel, where exporters introduce new or modified products;
  • the price discrimination channel, where exporters have fewer incentives to differentiate prices in various markets, so prices become lower;
  • the efficiency channel, where more competitive environment forces companies to restructure their production and increase productivity;
  • the lower costs of financing channel, where companies have more access to cheaper money.


Competitiveness factors

Before the work was commenced on the compiled database of 960 Polish enterprises, the possibilities offered by the “model” EFIGE database (compiled by Bruegel for EU countries) had been assessed. Based on the examination of internal resources of 6957 family companies in 6 EU countries, their ownership structure and the role of external managers, a positive impact of factors such as the foreign owner and foreign managerial staff was affirmed. Excessive concentration of family ownership may have a negative influence on the propensity to export. The role of external managers from outside the family proved to be positive, with the exception of globally internationalized companies (Wąsowska, 2017)[4].

The role of family firms as a factor determining export performance of Polish enterprises was also confirmed by the research carried out on our database (Gajewski and Tchorek, 2017)[5]. That article, which examines export determinants at the level of the whole country and by region, confirmed a significant role of such factors as company size, innovation, foreign investor presence and non-price competitiveness. The differences between Poland “A” (western) and Poland “B” (eastern) were indicated, as was some possible convergence in export performance stimulated, however, by different factors (e.g. family firms turned out to have a greater impact on export performance in the east than in the west, perhaps because family ownership is often a solution to the problem of unavailability of certain resources for companies operating in imperfect markets).

The article on the significance of exchange rate risk and transaction costs as well as their impact on export decisions corroborated a negative impact of exchange rate risk while starting and conducting export activities and expanding them to new markets (Brzozowski and Tchorek, 2017) [6]. Companies experiencing difficulties in access to financing, those benefiting from funding abroad, companies experiencing the exchange rate devaluation with a negative influence on their financial balance, innovative and importing enterprises are more affected by exchange rate risk. Meanwhile, firms with a foreign shareholder, firms with a higher share of euro-denominated receivables, those invoicing exports in Polish zlotys, those competing by product quality and distribution channels, and companies considering their business expansion after the euro introduction are not so sensitive to the risk of exchange rate fluctuations.

The research on competitiveness factors of innovative industrial enterprises and their perception of the optimal zloty-euro exchange rate confirmed that enterprises prefer an undervalued exchange rate (Brzozowski and Tchorek, 2018)[7]. A weak exchange rate is a kind of “compensation” for riskier export and innovation activities linked with more barriers to access to financing and more difficulties in the labour market than in the case of companies that are focused solely on the internal market and non-innovative. Based on the research on Polish firms, we claim that although innovative companies use technology to gain competitive advantage, their success and innovation activity also hinge on prices in general and on a weak exchange rate in particular because it helps to overcome market imperfections related to financial and labour resources.


[1] Brzozowski M., Tchorek G. (2017), The “Euro Effect” and Outward Foreign Direct Investment, Revista de Economia Mundial, (45), 121–142.

[2] Barteczko K., Tchorek G. (2016), Has the euro led to the trade creation effect?,, (6), 7–21.

[3] Tchorek G. (2017), The euro influence on companies’ export activity,, (6), 7–21.

[4] Wąsowska A. (2017), Internationalisation of Family Firms: the Role of Ownership Structure and Composition of Top Management Team, Entrepreneurial Business and Economics Review, 5 (1), 169-185.

[5] Gajewski P., Tchorek G. (2017), What drives export performance of firms in Eastern and Western Poland?, European Planning Studies, published online,

[6] Brzozowski M., Tchorek G. (2017), Exchange Rate Risk as an Obstacle to Export Activity, Gospodarka Narodowa, 3 (289), 115–141.

[7] Brzozowski M., Tchorek G. (2018), Exchange Rate Level, Innovation, and Obstacles to Growth. Who Needs a Weak Zloty?,  Ekonomický Časopis, forthcoming.