The Effect of Investment Promotion on FDI Flows: a Case of the Baltic States

The article explores the effect of investment promotion on FDI flows in the country. The first part of the article analyses scientific literature on the interconnection between investment promotion and determinants of FDI. Three Baltic States have been chosen for the purpose of empirical analysis. Three main tools for investment promotion are highlighted. In order to determine the impact of FDI determinants on FDI flows and the role of investment promotion among them, three multiple criteria methods are used. The conducted analysis has confirmed the theoretical statements that investment promotion influences FDI flows and has a strong effect on FDI on the condition that investment promotion is fully introduced

Foreign direct investment: driving factors and outcomes for secure and sustainable development

Driving factors and implications of foreign direct investments were widely discussed during the latest decade. Anyway, impression remains that due to the specifics of that type of investment, misinterpreting of their economic composition is rather frequent than rare. Hence, the paper starts with detailed classification of investment types. The next part of the paper is devoted to a review of approaches to FDI driving factors and outcomes. Finally, current trends of foreign capital flows in Lithuania, Latvia and Estonia are being observed and evaluated. Novel insights about new consistent patterns of foreign capital directions are being provided. The paper is being finalized by indicating contemporary implications of FDI withdrawal for host country related to its further secure and sustainable development

Economic development and its influence on state capital structure

The article deals with the problem of the formation of the state capital and examines the influence of local or foreign capital on the national economy. The extent to which GDP depends on foreign debt, on foreign direct investments and on financial support was determined. GDP, the export/import ratio, inflation and average wage level are attributed to the key factors defining the growth of economy, i. e. depending on the capital structure. The average wage level is employed as the unit for the calculation of labour costs. It can be observed that the nature, intensity, and impact of the foreign capital vary in different business sectors. The conclusion can be drawn that the impact of the foreign capital and its factors depend only on the country-specific features

Economic development and its influence on state capital structure

International audienceThe article deals with the problem of the formation of the state capital and examines the influence of local or foreign capital on the national economy. The extent to which GDP depends on foreign debt, on foreign direct investments and on financial support was determined. GDP, the export/import ratio, inflation and average wage level are attributed to the key factors defining the growth of economy, i. e. depending on the capital structure. The average wage level is employed as the unit for the calculation of labour costs. It can be observed that the nature, intensity, and impact of the foreign capital vary in different business sectors. The conclusion can be drawn that the impact of the foreign capital and its factors depend only on the country-specific features

Tiesioginės užsienio investicijos Baltijos šalyse: iššūkiai ir problemos

Straipsnyje autorės apžvelgia tiesioginių užsienio investicijų pritraukimo problemą ir iššûkius, su kuriais susiduria Baltijos šalys įgyvendindamos TUI politiką. Visos trys – Estija, Latvija ir Lietuva – tarpusavyje aršiai konkuruoja dėl TUI. Ypač aukštųjų technologijų sektoriuose. Be to, nors užsienio kapitalo įplaukos turi didelę reikšmę šių šalių ekonomikos plėtrai, tačiau TUI duoda vėluojantį teigiamą efektą jų ūkio augimui. Nors Estija TUI pritraukia daugiausiai, tačiau atlikta analizė įrodo, kad labiausiai priklausoma nuo užsienio kapitalo yra Latvija. Iš visų trijų Baltijos valstybių mažiausiai TUI pritraukia Lietuva. Lietuvos verslo klimatą blogina korupcija, sudėtingas darbo santykių ir mokesčių reglamentavimas. Palyginti su Estija, kitos dvi valstybės beveik tris kartus mažiau lėšų skiria moksliniams tyrimams bei eksperimentinei veiklai plėtoti, nors visų trijų valstybių aukštųjų technologijų ir žinioms imlūs sektoriai – prioritetiniai. Lietuva susiduria ir su nemažomis TUI reglamentavimo problemomis. Ryškūs prieštaravimai XV ir XVI vyriausybių programose. Dabartinės vyriausybės programoje numatoma suformuoti naują TUI strategiją, kuri būtų grįsta ekonominiais prioritetais. XVI, kaip XV, Vyriausybės pagrindinis prioritetas – užimtumo didinimas ir nuoseklus požiūris į darbo vietų kūrimą. Tačiau, pasirenkant tikslinius verslo sektorius, susidaro konfrontacija su prieš tai vykdyta politika. Todėl investuotojams gali kilti abejonių dėl Lietuvos siekio kryptingai plėtoti verslą. Lietuvoje ir Latvijoje investuotojams, pretenduojantiems į valstybės paramą, keliama nemažai reikalavimų. Ypač investicijų apimčiai. Taip valstybė pralaimi kovą pritraukdama mažesnės vertės projektus. [...

Foreign direct investment policy as an instrument for sustainable economic growth: a case of Ireland

It is scientifically proved that foreign direct investments (FDI) are one of the life-forces for economic growth. Foreign investors use local labour, capital, and natural resources that are constantly running out and limited. However, global companies that translocate their production process often devastate the nature of the host country. Decline of natural resources and climate changes forces to think about how people could develop country’s economy and social welfare, but at the same time save nature and its resources. Global companies are the main developers of economy and social welfare, but also, they are environment polluters. The value of sustainable development is quite obvious, but there is a lack of research about the relationship between FDI and sustainable development in the literature. The literature separately analyses the problem of sustainable development or FDI impact on economic development. Often, FDI is described by determining the effects, but it does not address the question of expedient foreign capital, which would provide the greatest benefit to the host country. The article analyses the influence of foreign direct investments (FDI) on sustainable development. It develops the concept of sustainable investment. It aims to find out whether the purposively formed foreign direct investment policy can ensure the sustainability of economic development. In this case, FDI can become an instrument for the implementation of sustainable development. This study is about Ireland case. The choice is not coincidental. Since this country applied FDI policy, it was able to transform the economy rapidly, and also it became one of the most developed countries in Europe. The authors of the research chose ten economic, social, and environmental factors that define sustainable growth. The analysis revealed the contact between the indicators of FDI and sustainable growth in different periods of the economic cycle

Causal Nexus Between Export and Economic Growth in the European Union Countries

The relationship between export and economic growth is still a topic of discussion by researchers. Some studies have confirmed that export leads to economic growth, while others see economic growth leads to export. Many countries are still in a dilemma of whether to open up their economies to promote export or whether they should concentrate on economic activities, which will promote export. This paper has aimed to examine export – growth nexus in the European Union (EU) countries during the period of 1995 – 2015. Descriptive statistics analysis and econometric methods have been applied for this purpose. On the basis of correlation analysis, twentytwo countries have had significant relationships between export and economic growth. Granger causality test has been applied to detect the direction of causality. The research has found unidirectional causality running from export to GDP in Poland, Portugal, Slovakia and Sweden. In contrast, unidirectional effects from GDP to export have been detected in eleven the EU countries, such as Belgium, Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Netherlands, Romania and Slovenia. Moreover, the research also has noticed bidirectional causality in Denmark. That is, GDP causes export and vice versa. Finally, in six countries, such as Austria, France, Germany, Italy, Luxembourg and Malta Granger causality has not been found. It means that export does not cause economic growth and vice versa. The presence of a causal link between export and economic growth has implications of great importance on development strategies for the EU countries