Empirical Analysis of the Dependence of the Foreign Direct Investments on the chosen Macroeconomic Factors

The current paper focuses on the analysis of the impact of some vital macroeconomic indicators on the FDI. The present study investigates such macroeconomic factors as: GDP, Inflation, General Government Gross Debt, Strength of Legal Rights Index and Total Tax Rate. The current paper examines the following main research questions: What is the link between the foreign direct investments and the mentioned macroeconomic indicators? What is the character and intensity of this relationship? The econometric analysis of these research questions is done with the help of the panel data tools. The analysis was applied to different income categories; only for GDP the null hypothesis of its statistical insignificance can be rejected for each income group on the 5% (for the group 1 on the 10%) level of significance. Analyzing the dependence of FDI on GDP the time effect was examined, it was shown that only for years 2006-2008 the null hypothesis of the statistical insignificance can be rejected on the 5% level of significance. The empirical part was ended by the cluster analysis dividing the countries into groups based on the scenario of the FDI' development during the analyzed period.