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This study aims to examine the share of foreign direct investment (FDI) in creating the value added (VA) of innovative and other industries in Poland in 2004–2020.

In terms of the empirical analysis of FDI stocks, their locations were divided into innovative and other industries. The differences in the creation of VA are presented by domestic and foreign enterprises. The impact of FDI stocks in individual industries on gross domestic product (GDP) changes was assessed using the vector error correction model (VECM).

FDI from innovative industries generated approx. 7% VA of the Polish economy in the years 2004–2020. In 2009–2018, the share of VA of foreign enterprises in innovative industries in Poland showed a faster growth (by 5 pp) than in other industries. The results of decomposition confirm that the level of explanation of GDP by FDI in innovative industries is higher than in other industries.

Changes in the classification of activities reduce the time series period available.

This study explains the participation of foreign and domestic enterprises in creating VA. The results are useful to pursuing the national investment policy.

The economic results of domestic and foreign enterprises in the host country affect the economic growth and development and ultimately the socio-economic conditions of life.

This work provides some additional explanations for the inconclusive results of international research into the impact of FDI on GDP or the spillovers effects. Its usefulness concerns the detailed impact of FDI by industrial structures on GDP.

Innovation is necessary to ensure consistent economic growth and to meet the global competition. In view of this, the purpose of this study to check the effect of governance quality as a tool for fostering innovation performance.

The empirical analysis was arranged on 20 year’s (2000–2019) data from South Asian economies. Subject to the existence of cointegration, the authors use the fully modified ordinary least square model for regression analysis and check the robustness through robust least square model.

The empirical findings infer that all dimensions of governance have a positive significant impact on both research and development expenditures and trademark applications jointly known as innovation performance. In addition, the empirical analysis discloses the positive effect of all control variables, including FDI inflow, banking sector development, economic growth, ease of doing business index and government subsidies on innovation activities. The analysis confirms the “grease the wheel” role of governance in fostering innovation.

It is apparently recommended to strengthen the exercise of better governance to harvest better innovation scores.

This study advocates the positive role of individual dimensions of governance recommended by existing literature and complements the literature by jointly exploring the impact of all governance dimensions on overall innovation performance.