The essence of foreign direct investment in international relations: impact on the socio-economic development of countries and their consequences

Korolenko Natalya
Ph.D. in Economics, Associate Professor of the Department of International Economic Relations, Odessa National Economic University, Odesa, Ukraine, e-mail: nataly_kor@ukr.net

Belaya Daria
student of Odessa National Economic University, Odesa, Ukraine, e-mail: dacha9101@gmail.com

Cite this article:

Korolenko N., Belaya D. The essence of foreign direct investment in international relations: impact on the socio-economic development of countries and their consequences. Scientific Bulletin of the Odessa National Economic University. 2021. № 3-4 (280-281). pp. 115-121.

Abstract

The article analyzes the movement of foreign direct investment and its impact on the socio-economic development of countries. Methods of analysis and synthesis, the method of system analysis, empirical methods, economic and statistical methods, as well as the method of rising from the abstract to the concrete have been used in the piece of work. The authors investigated the concept of foreign direct investment and its functions in the international economy. The paper shows the main factors that affect the movement of foreign direct investment. One of the main factors in attracting foreign direct investment is the favorable investment climate of the recipient country. The importance of the investment climate and offshore zones for the movement of foreign direct investment between countries has been determined. Considerable attention is paid to donor and recipient countries that form investment relations and create international economic relations in the world, which are the driving force of socio-economic development of the world. The influence of transnational corporations on the movement of foreign direct investment as an integral part of international capital is emphasized. Changes in the investment policies of states in 2003-2019 according to the UNCTAD report have been indicated. Attention is focused on the consequences of liberalization and regulatory policies that have a direct impact on foreign investment flows to the state. The impact of COVID-19 on the turnover of foreign direct investment has been determined. The state of foreign investment movement in Ukraine, as well as ways to improve the investment climate in Ukraine to attract foreign capital have been analyzed. The results of the study have determined the impact of foreign direct investment, namely the positive and negative consequences for both the host country and the investor country. It has been concluded that FDI have the most important contribution to the socio-economic development of the state.

Keywords

foreign direct investment, investment climate, donor countries, recipient countries, offshore zones, international movement of foreign direct investment, transnational corporations (TNCs).

JEL classification: : F210, F320, H800

УДК: 339.5

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