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The Challenging Task of Governing Cross-Border Investment in Peripheral Regions: Polish Investors in Northeast Germany

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The article investigates the challenging task of governing cross-border investment in peripheral regions. The main objective is to identify common opportunities and obstacles in the Pomerania Euroregion by taking the case study of Polish citizens/ entrepreneurs investing in northeast Germany. This relatively new phenomenon is accompanied by large uncertainties and risks, and lacks further empirical insights. At the same time it breaks new ground, creates alternatives, calls for the development of efficient modes of cross-border cooperation and addresses mutual governance issues on an inter-regional basis between manifold stakeholders on both sides of the border. The case study summarises findings from fieldwork, elaborates a quantitative and qualitative assessment of cross-border governance measures within formal and informal institutions, and tries to formulate policy recommendations for prospective approaches
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QUAESTIONES GEOGRAPHICAE 33(4) • 2014
THE CHALLENGING TASK OF GOVERNING CROSS-BORDER
INVESTMENT IN PERIPHERAL REGIONS: POLISH INVESTORS
IN NORTHEAST GERMANY
SebaStian Kinder1, Kamil liS1, Wolfdietrich PeiKer2, lech SuWala2
1Economic Geography, Eberhard Karls University in Tübingen, Germany
2Economic Geography, Humboldt University in Berlin, Germany
Manuscript received: October 18, 2013
Revised version: March 7, 2014
Kinder S., liS K., PeiKer W., SuWala l. 2014. The challenging task of governing cross-border investment in peripher-
al regions: Polish investors in northeast Germany. Quaestiones Geographicae 33(4), Bogucki Wydawnictwo Naukowe,

abStract: The article investigates the challenging task of governing cross-border investment in peripheral regions. The
main objective is to identify common opportunities and obstacles in the Pomerania Euroregion by taking the case study

large uncertainties and risks, and lacks further empirical insights. At the same time it breaks new ground, creates al-

issues on an inter-regional basis between manifold stakeholders on both sides of the border. The case study summaris-

within formal and informal institutions, and tries to formulate policy recommendations for prospective approaches.
Key WordS
Address of the corresponding author: Sebastian Kinder, Eberhard Karls University in Tübingen, Chair in Economic Geography,
Rümelinstraße 19-23, 72070 Tübingen, Germany; e-mail: sebastian.kinder@uni-tuebingen.de
Introduction
Germany and Poland are not only neighbour-
ing countries in the European Union, but also
close trading partners. A detailed look at Po-
land’s trade balance reveals that Germany is by
far its most important trade partner accounting
for approximately one forth of its trade volume
  
bank 2012; GUS 2012)1. Even so, the statistics of
1 However, there are some statistical ambiguities be-
tween German and Polish data due to asymmetries
stemming from different methodologies applied. A
-
nelled through German harbours; these include also
goods originating, e.g., from China and declared af-
      
different story. Whereas the cumulative inward

2010 amounted to 22 billion Euro, only one bil-
lion Euro was invested in the opposite direction
during the same time period (Robak 2011: 10;
terwards as “German goods”. Another issue is the
large amount of re-exports (including goods such as
automotive parts, textiles, apparel) initially imported
to Germany and then exported again. This creates dis-
crepancies between the countries of origin and des-
tination. Therefore, the Polish Central Statistical Of-

to Poland (e.g. €34 billion, 2011) than the German
   Statistisches Bundesamt)
for German exports to Poland (€43.5 billion, 2011)
(Botschaft... 2012: 4).
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28 
Botschaft... 2012: 5). Interestingly, current data
 
Germany between 2008 and 20112 (Table 1).
We want to explore this phenomenon at a
much smaller scale by taking a closer look at
       -
many, especially in the former county (Landkreis)
of Uecker-Randow3. We will focus on how this
phenomenon is governed. We have chosen Ueck-
er-Randow for the following three reasons: (1)
its vicinity to the Pomerania Euroregion’s only
     
(Maps 1 and 2), (2) the highest concentration of
enterprises run by Polish owners, proprietors, or
managing directors in the German part of the re-
gion (Table 2), and (3) a detailed media analysis
preceding the project concerning Polish entrepre-
neurial activities (Neuser, Wicke 2013).
Since Uecker-Randow borders Poland and is
located approximately 15 km west of the city cen-
tre of Szczecin and roughly 6 km from the city’s
outskirts, it is not surprising that the county sus-
tains over three-fourths of Polish enterprises in
the neighbouring German counties (Table 2). Al-

   
industries like construction, services or trade rep-
      
2 
that might depend on individual large-scale invest-
ment projects in certain years, we want to investigate
if this trend is the result of a small, but solid back-
ground in the Pomerania Euroregion with regard to
the county (Landkreis) of Uecker-Randow.
3 
in the east of the German federal state (Bundesland) of
Mecklenburg-Cispomerania bordering Poland (Map
1). The county reform (Kreisgebietsreform) of 2011 led
to a consolidation and the creation of a new, larger
county of Cispomerania-Greifswald encompassing
the old counties of Uecker-Randow, Eastern Cispo-
merania and the Hanseatic City of Greifswald.

2008-2011 (in billion Euro).
Year 
Poland

Germany
2008 € 1.08 billion € 0.21 billion
 € 2.14 billion € 0.12 billion
2010  € 0.30 billion
2011  € 0.41 billion
Source: Bundesbank 2012: 14,17,20,28,31.
Malmö
Mecklenburg-
Vorpommern
Mecklenburg-
Vorpommern
BrandenburgBrandenburg
BERLINBERLIN
SkåneSkåne
ZachodniopomorskieZachodniopomorskie
Szczecin
100km
0
N
Map 1. Extent of the Pomerania Euroregion.
Source: Pomerania 2013a.
RügenRügen
Uecker-
Randow
Uecker-
Randow
Mecklenburg-
Strelitz
Mecklenburg-
Strelitz
DemminDemmin
UckermarkUckermark
BarminBarmin
NordvorpommernNordvorpommern
Ost-
vorpommern
Ost-
vorpommern
50km
0
BERLINBERLIN
Stralsund
Greifswald
Neubrandenburg
Neubrandenburg
N
Map 2. Former German counties
in the Pomerania Euroregion.
Source: Pomerania 2013c.
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 29
Amt... 2012). This data is also partly visible in
the media (print, visual) by means of ambivalent
headlines like “Help! The Poles are arriving!”
(Kuiper 2007) or “East German village experienc-
es an unexpected heyday with the assistance of
Poles” (Trentmann 2011).
Concerning these facts, our main objective
is to investigate the challenging task of govern-
ing cross-border Polish investment in Ueck-
er-Randow. Most literature so far has concen-
trated either on general issues of cross-border

     
       
direction of investment (e.g. foreign or German
 
et al. 2005; Maack 2010; Zimny 2012). This arti-
cle aims to identify common opportunities and
obstacles in the Pomerania Euroregion by taking
  
investing in Uecker-Randow. This relatively new
phenomenon is accompanied by large uncertain-
ties, risks and lacks empirical insights. At the
same time it breaks new ground, creates alterna-

of cross-border cooperation, and addresses mu-
tual governance issues on an inter-regional basis
between manifold stakeholders on both sides
      -
     
-
ernance measures within formal and informal
institutions, and tries to formulate policy recom-
mendations for prospective approaches based on
general theoretical discussion of governance and
empirical facts from Uecker-Randow.
Table 2. Enterprises run by (a) foreign, (b) European Union, (c) Polish owners, proprietors, or managing direc-
tors in selected counties of the German part of the region, Sept. 2011.
Foreign-run
Industry  HGW MST NB  UER Total
Construction 4 0 1 3 3 30 41
Services 26 27 12 32 32 87 216
Tourism 26 43 24  58 32 222
Trade  28 35 37   261
Manufacturing 2 3 6 4 10 15 40
Other 7 0 4 0 7 1 
  101 82 115  258 
European Union
Industry  HGW MST NB  UER Total
Construction 4 0 0 2 1  36
Services 21 16 5 17 18  156
Tourism 2 15 6 7  6 55
Trade 18 11 20 21 20 77 167
Manufacturing 1 1 6 4 7 12 31
Other 7 0 2 0 7 1 17
 53 43  51 72 204 462
Polish
Industry  HGW MST NB  UER Total
Construction 4 0 0 0 0  33
Services 3 3 2 2 10 78 
Tourism 0 2 3 0 2 3 10
Trade 3 2 5 3 7 57 87
Manufacturing 0 0 0 0 2 12 14
Other 5 0 0 0 0 0 5
 15 7 10 5 21  247

Uecker Randow

Unauthenticated
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30 
Governance
New governance modes experienced a tre-
mendous interest in the wake of deregulation,
liberalisation, privatisation and de-bureaucrati-
sation triggered by the Washington Consensus
-
toussi, Saraceno 2013). Governance is one of the
     -

Pierre 2000; Hirst 2000; Kjaer 2004; Schuppert

(Fürst 2003; Einig et al. 2005; Sparke 2006). The
      -


clearly distinguished governance theory. Many
authors have attempted to provide an overview
of different varieties, emphasising multiple dif-
ferences and similarities (e.g. Fig. 1).
In general, governance pools groups of differ-
ent institutions and actors that do not belong to
the same government sphere. The term implies
interdependence between the powers of institu-
tions associated with collective action where au-
tonomous actors’ networks may intervene and
agency is not entirely left to the state power or

With regard to cross-border regions in the
     -
ly-used notion to describe the mechanism of a
territory being governed by a combination of
manifold levels and types of governmental au-
thorities operating in the same space. This chal-
lenging task was tackled by the creation of so-
called Euroregions (sometimes also referred to

2004) in the EU, which represent multilevel in-
stitutionalisation where member states rath-
er than the European Commission (EC) are in
charge of allocating funds according to the sub-
sidiarity principle (Heddebaut 2004: 73). Eurore-
gions aim to achieve greater integration by an
    
   
      
of ‘partnership’ and ‘subsidiarity’, transnational
spatial planning, and inter-governmental frame-
works envisioned as ‘multi-level polities’. These
frameworks are orchestrated by a multiplicity of
actors including the EC, national governments,
regional and local authorities, non-governmen-
tal organisations, associations, unions, educa-
tional institutions, public-private partnerships,
and many other entities of the wider civil society
(Hooghe, Marks 2001).
Although constructed after decades of exper-
imentation in political, economic, social and cul-
tural decentralisation at sub-national scales with
sovereign member states, especially Euroregions
in Central and East-European countries face
multiple governance dilemmas and remain “lab-
oratories of European integration” (Kramsch,
Hooper 2004: 3). There are still plenty of obsta-
cles inhibiting effective cross-border coopera-
tion and mutual governance. They can be dis-
tinguished along the lines of legal, institutional,
-

The balancing act of each region within Europe-
an cross-border territories is to maintain its local
identity while working in the national context

cooperation at the same time (Heddebaut 2004).
This article highlights socio-economic obstacles
when pursuing mutual governance in the Po-
merania Euroregion between northwest Poland
(West Pomeranian voivodeship) and northeast
Germany (parts of the federal states of Mecklen-
burg-Cispomerania and Brandenburg) concern-
ing cross-border investment of Polish citizens in
Germany4.
4 The Pomerania Euroregion represents a special case
and integrates three EU member states (Map 1). The
Swedish Scania region has not been included into the
study for several reasons: an increased complexity of
governance modes, the special geographical setting (it
is separated from Poland and Germany by the Baltic
Sea), and poor connectivity (missing spatial proximity
to the Szczecin agglomeration) with regard to the case
study.
Hierarchical
governance
Closed co-
governance
Open co-
governance
Self
governance

Unauthenticated
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 31
Demographic and economic situation
in Uecker-Randow
The former county of Uecker-Randow is lo-
cated in the south-eastern corner of the German
federal state of Mecklenburg-Cispomerania. It
was administrated from Pasewalk, the largest
town in the county. Currently, this region faces
major demographic and economic challenges

    
of the lowest values nationwide. Simultaneous-
ly, the unemployment rate, which is more than
twice as high as the rate of Germany, indicates
a distinctly weak economic situation. Structural

transformation of the state-commanded econo-
     
-
nomic performance and employment, especially
young people seeking work emigrated from that
      

to 72,137 inhabitants. Thus, the demographic
situation is characterised by a distinct ageing
(Thiemann, Wockenfuß 2013).
The eastward enlargement of the European
Union, including the extension of its Common
Market area, offers new opportunities to that re-
gion, as it is no more situated at the border of the
     
possibilities for cross-border activities with the
proximate city of Szczecin with roughly 400,000
inhabitants (GUS 2012: 655) and its agglomera-
tion. Some Polish citizens even prefer to reside
in Uecker-Randow due to cheaper rents than in
Szczecin, helping both to decrease the vacancy
rate of properties and compensate for the loss
of inhabitants on the German side. This is a con-
  
the Polish side of the border, such as an increased
cost of living.
With regard to the economic challenges, hy-
pothetically, self-employed Poles and investors
may contribute to the regional per capita income,
while investors may even create employment.
      
small and medium enterprises, also with regard
to cultural and administrative distances, gov-
ernance institutions can be considered to play a
crucial role in successful investments in Ueck-
er-Randow, and therefore in a possible develop-
ment of that region. In the following, several rele-
vant governance institutions are analysed on the
basis of the supply of services for investors from
Poland to Germany.
Formal institutions in Cispomerania
Although governance of a Euroregion in-
    
spheres, as mentioned above, initiatives from in-
        

accessible ones for pioneers and private inves-

this relatively new phenomenon and taking into
account the complexity of governance modes,
different administrative regions (in Germany,
the very former county of Uecker-Randow, and
in Poland) and levels as well as activity spheres
(public-administrative vs. economic), we have
developed a synopsis showing the numerous
interrelationships between the stakeholders in
the region involved (Fig. 2). Moreover, with spe-
cial regard to bottom-up governance modes, we
distinguish between formal and informal insti-
      -
    
associations, or administrative-governmental
institutions that communicate their range of of-
fers for potential investors in an explicit way, via

Informal institutions are individuals or groups
that assist potential investors without explicitly
offering services in the media but rather commu-
nicating them via personal networks.
Table 3. Comparison of demographic and economic
key data of Germany and of the county of Uecker -
-Randow.
Per capita
income
Unemployment
rate
Share of pop-
ulation older
than 50 years
Uecker-
Randow
€ 17,633
  
Germany
(average)

  
Source: own compilation based on data from Thiemann and Wock-
enfuß (2013).
Unauthenticated
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32 
The Pomerania Euroregion
We start the analysis of relevant institutions
governing our selected region with a closer look
at the Pomerania Euroregion. This cross-border
region is organised as an association of munic-
ipal administrations and other institutions in
north-eastern Germany, north-western Poland
and southern Sweden (Map 1, Fig. 2). Its main
objective is to develop the bordering regions
and to revive the “historically persistent” ties
between those countries (Pomerania 2014). Be-
sides supporting cross-border exchange between
social and cultural associations embraced by the
paradigm of “creating areas of border-crossing
economy and services” (Pomerania 2014), eco-
nomic development is one of the main targets of
the Pomerania Euroregion. This objective can be
realised by assistance for economic investments,
development of regional infrastructure common-
ly funded by INTERREG-A programmes, and
the creation of economic cooperation by means
of know-how exchange via cross-border fairs and
seminars. Although those economy-related activ-
Fig. 2. Formal and informal institutions in Uecker-Randow and their services for Polish investors.
Source: own compilation based on information from research.
Unauthenticated
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 33
ities of the Euroregion are geared in particular to-
wards small and medium-sized enterprises rep-
resentative of most business entities (no matter
whether German or Polish) of the region, they are
not explicitly addressed towards Polish-owned
enterprises operating in the German part of the
region.
Furthermore, the establishment of Ger-
man-Polish grammar schools like the one in

may increase the attractiveness of living on the
German side for Polish people. In a similar way,
       
ease the immigration and social integration of
Polish citizens in Germany. It assists Poles in
administrative procedures and the search for
housing, language courses and schools (Pomer-
ania 2013b). This integration assistance, together
with social and cultural exchanges, may bridge
cultural margins between both countries and
therefore increase the willingness for Polish citi-

small enterprises or become self-employed. It
can already be stated at this point that these for-
mal institutions lack concrete assistance needed
with the regional economy for the Polish inves-
tors in many cases.
The Neubrandenburg Chamber of
Commerce and Industry
The local Chamber of Commerce and Industry
(Industrie- und Handelskammer, abbr.: IHK) is
situated in the city of Neubrandenburg and cov-
       -
trict and Cispomerania-Greifswald, including the
former county of Uecker-Randow. As all econom-
ic chambers in Germany, it is an institution under
public law which incorporates all enterprises and
craftsmen of that region (Fig. 2). The IHK gives
      -
ministrative formalities, and offers further educa-
tion programmes in business administration from
      
(IHK 2014). According to an IHK representative,
those services are also available for Polish entre-
preneurs, but are not target in the course of any
particular recruitment campaigns, except book-
lets in the Polish language (IHK Agent, 2012). Of
particular interest for our analysis are the two
explicitly Poland-oriented institutions associated

Firstly, the House of Economy (Haus der
     -
scribes itself as a “catalyst for the European in-
tegration process” and arranges business ties be-
tween German and Polish enterprises by means
of instruments like web-based online exchange
and contact fora. Those virtual spaces are pre-
dominantly used by Polish businesses interested
in the German market and searching for German
cooperation partners. However, some of those
contacts might theoretically turn into a direct
investment or a joint venture, and therefore this
exchange could stimulate Polish investments in
Germany. Quantitative data or reliable empirical
evidence with regard to those issues are not avail-
able. With regard to foreign direct investments,
according to an agent from that institution, the
House of Economy is merely directed towards
German investors doing business in Poland and
offers information and a variety of assistance
 
functions rather similar to those of a foreign trade
chamber and is not relevant for Polish investors
(IHK 2013b).
Secondly, another institution whose target is
to intensify relations between Polish and German
enterprises is represented by the German-Polish
-
kreis), which has been holding meetings once a
month in Szczecin since 2001. With a wide array
of political and economic topics, these events
provide both information and networking op-
portunities for different stakeholders (IHK 2010).
Nonetheless, none of the institutions associated
with the IHK mentioned above provide a distinct
pro-active attraction for Polish investors to Ger-
many.
While comparing with other IHKs located at
the Polish-German border, we found that nearly
     
       
i.e. for German investors interested in business
activities in Poland. The chambers arrange coop-
eration between companies from both countries,
but none of those institutions addresses explicitly
potential Polish investors in Germany. Interest-
ingly, the Polish Chamber of Commerce in Ger-

Unauthenticated
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34 
renowned Polish enterprises and has its domicile

(Polska Izba... 2013). Therefore, it can be assumed
that there is neither a well developed network of
Polish chambers abroad, nor an effective assis-
tance for small or medium-sized enterprises in
the peripheral region.
The Uecker Region Development Agency
In comparison with the IHK, the Uecker Re-
     
Entwicklungsgesellschaft Uecker-Region mbH,
abbr.: FEG,) situated in Pasewalk, is more local-
ly anchored due to its territorially based compe-
tent jurisdiction restricted to the former county
of Uecker-Randow. It is predominantly funded
by the municipal administrations of that region
(Fig. 2). One of the main objectives, apart from
offering advice on funding programmes, start-
up management and cooperation contacts for
investors, is a pro-active marketing of location-
al advantages of the respective district at bilat-
eral meetings or fairs (FEG 2013b). While even
Chinese investors potentially interested in the
Uecker region market are explicitly addressed
(FEG 2013a), a pronounced assistance for Polish
investors in Germany could not be found on the

interview, in fact, this institution tries to attract
Polish investors in a pro-active way via presence
at trade shows and round tables (FEG Agent,
2012). For instance in 2004, in close collaboration
with the service centre of the Pomerania Eurore-
gion in Pasewalk and the Euro Info Centre in
Szczecin, the FEG organised an event in Szczecin
which explicitly addressed Polish entrepreneurs
interested in direct investment in Germany. They
were informed about the procedures of founding
start-ups in Germany and the potentials of the
Uecker-Randow region (Pomerania 2004). But
the FEG does not limit itself to Polish investors;
for instance, they also recruit and assist sever-
al entrepreneurs from southern Germany and
Hamburg (FEG Agent, 2012). Even if this insti-
tution seems to focus more on Polish investors in
Germany than other formal institutions, one can
observe a lack of communication and orchestra-
tion of services among those economic govern-
ance bodies.
Informal institutions supporting Polish
entrepreneurs in the border region
While the services offered by formal institu-
tions explicitly to Polish investors can be seen
as little pronounced, some informal institutions
        
       
by privation and personal fortunes of the recip-
ients. This shows that also autonomous actors
that do not belong to governmental institutions
can contribute with their networks to the whole
     -
mal institutions in Uecker-Randow, for example,
are individuals such as a real-estate agent, a pub
owner and the mayor of a border town, whose
services will be presented as case studies in what
follows.
The real-estate agent
The activities of one real-estate agency known
in the region, situated just at the Polish border
in Germany and run by a Polish agent, can be
seen as very useful from the perspective of Pol-
ish investors in the border area. The operation
services of the agency cover the German border
zone of the counties of Uckermark (in Branden-
burg) and Uecker-Randow (in Mecklenburg-Cis-
pomerania). Services include the sale and rent-
al of houses, plots and apartments. In 2007, the
then Polish entrepreneur and today’s real-estate
agent decided to settle down with his family in a
small German hamlet. One year later he opened
his business. At the same time, from 2008 to 2011
there was a big interest in the sale of mainly res-
idential buildings within German border com-
munities. Generally, according to the agent’s
       
-
terland. The agent observed that Polish citizens
who migrated to the German borderland were
willing to buy property and at the same time of-
ten to start a business, usually registered at the
place where they lived before (i.e. in Poland).
However, in recent years, the agency receives
-
panies. In the opinion of the agent, the border
region is mainly of interest to Polish micro-en-
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 35
terprises with up to three employees who con-
sider the geographical proximity to Szczecin
as an important factor. The biggest obstacle for
most of these entrepreneurs is usually lack of
knowledge of the German language. Therefore,
the real-estate agency seems to be of particular
interest to Polish investors, providing them with
consulting services in Polish and understanding
the German administrative paperwork (Polish
real-estate agent, 2012).
The procedure of setting up a business in
Germany is a complicated task for private Pol-
ish investors as the authorisation process to carry
out business activities in a desired location can
         
the reasons why some potential Polish investors
undertake investments in Polish regions instead.

or chambers of commerce, the membership of
which is mandatory in Germany, work different-
ly than in Poland and demand language exper-
   
the agent assists by informing investors how to
solve upcoming issues. He also helps in dealing
with the authorities and banks (Polish real-estate
agent, 2012).
     -
pertise and assistance in the real-estate sector, the
agent is an excellent example of a successful es-
tablishment of a functioning private business run
by a Polish owner in the German border region.
 
the region as well as a dense personal network,
which can also be very useful for more Polish peo-

Germany. Polish micro-entrepreneurs often use
the agent’s advice, cherishing personal contact
and relationships resulting in a climate of mutual
trust. Many Polish entrepreneurs, like a local Pol-
ish construction company or a Polish company
in the care-for-the-elderly industry, have bene-
 
kind of trust is considered to be built on strong
       
realised through spontaneous, sporadic and of-
ten impersonal contacts with agents from formal
-
tion for Polish investors seems to be tremendous,
although, in our opinion, the interviewee was
not fully aware of this (Polish real-estate agent,
2012). The agent serves as a good example of how
 
  -
ordinated multi-lateral formal governance insti-
tutions and structures reacting very rigidly to
new trends, like Polish investments in Germany.
The mayor
  
of a German border town in Cispomerania also
acts as an informal institution for Polish investors
in his responsibility area. Here, Polish companies
have been present since 2004, therefore he can be
seen as a pioneer and gatekeeper. The mayor’s
strategy for Polish investors seems to be simple
and effective: on the one hand, he maintains reg-
ular contact with Polish entrepreneurs during
       
business development, meets with potential in-
vestors from Poland to discuss aspects of their
relocation to Germany, and helps in dealing with
the authorities. His help to possible investors and
expertise lead to investments that may create jobs
in the town. On the other hand, the mayor en-
sures that Polish investors feel comfortable and
have a sense of security while making invest-
     
larger investors from western regions of Ger-
many or other countries forces the mayor to at-
tract every potential investor through a detailed

where even assistance for application is provid-

     
and banks (Mayor, 2012).
As an elected representative of his town, the
mayor acts to some extent as a formal institution.
  -
tions with investors and informs them about eco-
nomic opportunities in his town. Typically, the
commitment of mayors in the German part of the

of them do not see talks with potential investors
as one of their primary tasks. Instead, they re-
fer to formal institutions of German-Polish eco-
nomic cooperation. Mayors get only involved in
investors’ assistance if they engage themselves
with high personal commitment in various in-
formal activities. This commitment usually goes
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36 
far beyond their formal responsibilities. When a
mayor gives personal advice to an investor (e.g.
helping him to get funding from a local bank), he
will do so informally. In this respect the mayor’s
practice of action may change between formal
and informal. In the border region we observed,
however, that those mayors were most successful
       
diverse channels of informal practices apart from
their formal work. In sum, the mayor is anoth-
er example of how an informal institution may
assist Polish entrepreneurs in a way that larger
  
experience, extensive contacts and openness, his
services are certainly a big bonus to Polish entre-
preneurs setting up business in the German bor-
der area.
The pub owner and real-estate agent
Another informal institution that offers ser-
vices to Polish investors is a Polish pub owner
who also works as a real-estate agent. Together
with her husband, she runs a German pub in a
small border town. It is a meeting place for both
Poles and Germans from the surrounding area.
It is used primarily for cultural events and hosts
a variety of art and youth projects, e.g. German
and Polish children can exhibit their work. In the
meantime, she was able to revive the shrinking
and ageing German community by offering di-
verse services to interested young Polish fami-
lies who wanted to settle and start business here.
As in the case of the real-estate agent presented
above, she provides business consultancy mainly
based on everyday concerns for Poles who do not
speak German. At the same time, she acts like a
rich forge of information especially for micro-en-
trepreneurs from Poland, contributing to the de-
cision-making process of both, those investing
in Germany and those moving there with their
families. The pub owner mediates contacts with
the authorities and banks, and provides valuable
information and comments related to the funda-
mental issues of insurance and taxes, adminis-
trative and legal accounts. In her opinion, formal
institutions and their paperwork-intensive and
complex promotion measures lie beyond the ca-
pacity of day-to-day needs of potential Polish mi-
cro-entrepreneurs (Polish pub owner, 2012).
Polish investors and their engagement
of institutions

Karls University in Tübingen and Humboldt
University in Berlin in 2012, it could be proved
-
gion were SMEs, whereas a vast majority of Pol-
ish investments in the region were private single
economic activities and micro-enterprises with
      

of the Polish businesses belong to the trading sec-
tor, followed by dry construction and household
helpers (Fig. 3). All of those businesses either
consist of self-employed Poles or small enterpris-
es with very few employees. With the introduc-
tion of a full freedom of movement for workers
between Germany and Poland in 2011, some
    
(Akman, Akman 2013). For example, in one bor-
der town, seven Polish companies closed their
operation, but were soon replaced by new entre-
preneurs. This can be explained by the fact that
some of the people working so far on the German

work in the companies for which they previously
provided services (Mayor, 2012). While visiting
addresses from our database where Polish com-
panies ought to be located, in some cases we only
found ‘letter-box companies’, mostly operating
as housekeepers or geriatric nurses in parts of
south or west Germany. Those enterprises need
     -
ing, and a physical address in Germany due to

     
completing their paperwork or simply obtaining

Germany’ label if they advertise and sell certain
products elsewhere (FEG Agent, 2012).
Interviews with selected local enterprises
in the region brought to the fore the fact that
      
choice of investment in the region. In most of
       
study region and later decided to establish a
business there. A real-estate broker pointed out
that investment decisions of Polish investors in
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 37
the German borderland are often linked with the
decision to settle there (Polish real-estate agent,
2012). But there are also exceptions, such as a tax
 -
ate on the German market but the entrepreneurs

2012). Another example is an enterprise whose
owner lives in the same town but runs two com-
panies, one on the German side of the border and
the other in Poland (Polish entrepreneur, 2012).
Other motivations for investments in Cispomera-
nia are higher wages obtained for services (elder-
ly care, etc.), investment subsidies, or the effect of
the ‘made in Germany’ label allowing export to
western Europe.
According to the mayor of a border town,
-

companies often make changes, like the transfer
of business to another location or adjustments to
the market. They are aware of the competitive-
ness of the local economy and provide services
in industries that are often not of interest to Ger-
mans. Poles are also more willing to learn the
German language and work in the afternoons,
evenings and at weekends, which could be one
of the reasons why the majority of Polish compa-
nies operating in the region usually employ Pol-
ish workers (Mayor, 2012).
In many cases, before Polish investors make
the decision to invest in the German border re-
gion, they inform themselves about the market
on the basis of the formal institutions discussed
     
start-up programmes. These include different
measures (subsidies, cheap loans for setting up
a company) provided by the IHK, like a tax of-

        
2012). Interestingly, none of the Polish entrepre-
  
programmes of the Pomerania Euroregion, with
the exception of infrastructure projects. Two en-
trepreneurs even considered this institution to be
too bureaucratic (Polish pub owner, 2012; Polish
real-estate agent, 2012). The mentality of Polish
micro-entrepreneurs implies that personal con-
tact with people who are already familiar with
doing business in that region is very important
because they may share their knowledge and
experiences. It is important to establish relations
     
above. They do not rely on one single contact,
but provide information and answers to key

Germany at the very beginning.
Still, there are some barriers which great-
ly hinder the setting up of Polish companies in
  
cultural difference between Poles and Germans;
their lack of this type of knowledge often ham-
pers their functioning on the German market
(Mayor, 2012). We still consider that a large frac-
tion of neo-Nazis, which often turn their actions
against the Polish population in a town and the
surrounding villages, has a negative impact and
probably effectively discourages potential inves-
tors from Poland. A major factor for neo-Nazi ac-
tions is the jealousy of some local residents gaz-
ing on ambitious and dynamic Poles developing
their businesses. However, some gradual posi-
tive changes could be observed along with more

Conclusions
Table 4 summarises the results of a SWOT anal-
ysis focusing on the potential for economic and
demographic development in Uecker-Randow
with particular regard to Polish investors and
50
45
40
35
30
25
20
15
Trade Office
services
IT
services
Massage OthersHousehold
help
Dry-
construction
Real
estate
Welding
Number of
businesses
Interpreter
services
Hairdressing/
beauty
10
5
0
Fig. 3. Polish businesses in the municipality of

Source: own compilation based on information from the municipali-

Unauthenticated
Download Date | 9/24/15 11:12 PM
38 
immigrants. In this case, the strengths and weak-
     
disadvantages for Polish investors that can be
     
threats section takes into consideration possible
changes in the future. As one can see, there is
potential for both positive and negative region-
al development. Our research has revealed that
Polish immigrants residing in the German border
region may indeed increase the number of inhab-
itants. Since the bulk of immigrants are families,
this fact may turn the demographic trend of the
ageing population. Also the real-estate vacancy
rate has already been reduced by Polish property
buyers so far.
However, with regard to the economic im-
pact of Polish entrepreneurship, we found that
those investments were made predominantly by
micro-enterprises or self-employed people that
do not create either employment on any large
scale or a critical mass for stable growth. How-
ever, entrepreneurs in basic retail (e.g. groceries,
bakeries) and services (care for the elderly) may
improve local supply in a region affected by loss
of population and infrastructure. One interview-
      
ethic of Polish entrepreneurs. The examples of
larger Polish enterprises being often referred to
  
        -
ings in Uecker-Randow match the general trend
of Polish investment in Germany being much
less distinct in terms of volume than the other
way around. Also at the scale of the Pomerania
Table 4. SWOT analysis of Uecker-Randow with regard to Polish entrepreneurs.
Strengths Weaknesses
investment grants
preferential loan programmes of German banks
informal counselling institutions in cross-border busi-
ness (mostly individuals)
presence of trained advisors in region (business, tax,

 
there is such staff employed)
geographical proximity to Szczecin
good road access, access to motorway network
Poland’s access to Schengen Agreement
inexpensive real estate
effect of ‘Made in Germany’
 
formal institutions
lack of direct recruitment of potential investors from
Poland
economically underdeveloped region
impact of Szczecin on regional economy lower than
expected
    
region
lack of proper investment climate
ageing of local population
no common citizen identity
Polish-German prejudices
poor knowledge of German and Polish among major-
ity of local population
majority of inhabitants have poor skills in intercultur-
al communication
Opportunities Threats
formal institutions increasingly aware of Polish inves-
tors
addressing concrete potential investors
further development of Szczecin Metropolitan Area
construction of western bypass of Szczecin, Szczecin
better connected with German border communities
development of regional academic centres in Szczecin,
Greifswald and Neubrandenburg
introduction of Euro currency in Poland
further development of Polish settlement in border
communities of Germany, leading to compensation of
demographic trend
better language skills of Polish and German youth
strengthening Polish-German relations of good neigh-
bourhood
increase in cross-border awareness of region’s popu-
lation
formal institutions ignoring Polish investors
phasing-out of funding programmes
lack of coherent regional development strategy
further orientation of Szczecin towards large German
agglomerations like Berlin and Hamburg
decline of Szczecin as regional social-economic centre
maintenance of bad investment climate in border re-
gion
continuing unfavourable demographic trend
persistence of mutual prejudices
lack of language and cultural skills in majority of pop-
ulation
Source: own compilation on the basis of own research, 2013.
Unauthenticated
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 39
     
“There are several German direct investments in
the Szczecin region. Especially the special eco-
       
but investors did not come from the border re-
gion. There have been rarely any larger Polish in-
vestments in Cispomerania” (Maack 2010: 42 ff.).
Besides such disadvantages as lack of a high-
ly educated labour force, lack of language skills,
and existing prejudices (Table 4), one of the rea-
sons that may hinder Polish investors could be
      
-
tutions. While the formal institutions are either
public or under public law, the informal institu-
tions in our sample are solely individuals. With
regard to formal institutions, we could hardly
 -
vestors except the presence of the FEG at some
trade shows and round-table meetings, not of-
     -
  
public institutions, the interviews revealed that
some Polish investors considered those institu-
tions to be too bureaucratic. Instead, Poles seem
to prefer informal institutions that give more as-
sistance via personal advice and their local net-
works. We could hardly identify any interaction
between the formal and the informal government
sphere. This is why one can classify those infor-
mal institutions as a self-governance type of gov-
ernance (Kooiman 2003) existing in parallel to the
sphere of various formal institutions.
In order to further diminish investment barri-
ers for Polish entrepreneurs, formal institutions
would be well advised to realise the potential
of Polish investors and explicitly address them,
including services in the Polish language and
recruitment among communities of potential in-

the development of the border region in a posi-
tive way.
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 41
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-
er-Region, 2012.
Agent from the IHK Neubrandenburg, 2012.
Mayor of a town in West Pomerania, 2012.
Polish entrepreneur in West Pomerania, 2012.
Polish owner of a pub in West Pomerania, 2012.
Polish real-estate agent in West Pomerania, 2012.

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... bei der Niederlassung oder einer kulturellen Annäherung, dient supranationale Integration häufig konkreten wirtschaftspolitischen Zielen. Beispiele sind der Abbau nicht-tarifärer Handelshemmnisse, die Koppelung von Wechselkursen, die Verringerung des Arbitragerisikos, die Erleichterung von Arbeitsmigration und die Harmonisierung von Abgabenregelungen (BALL et al. 2009;DANIELS et al. 2004;KINDER et al. 2014). ...
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