ASSESSMENT OF FACTOR INFLUENCING ATTRACTION OF FOREIGN DIRECT INVESTMENT TO DEVELOPING ECONOMIES

Modern trends in economic development are characterized by intensification of competition, globalization of markets and concentration of capital. Attracting foreign direct investment plays a significant role in the growth of developing economies. Assessment of influence that the foreign capital exerts on the receiving party was studied in-depth by a wide range of Russian and foreign scholars, however, the issue is still a debating point among the modern economists. Due to this, the purpose of this paper is to reveal and evaluate the factors that influence attraction of foreign direct investment to developing economies. The paper uses comparative analysis and generalization of available information as its main methods; besides that, it undertakes a content analysis of reports and analytical pieces from leading Russian and foreign works published during several recent decades pertaining to the issue of determination of factors influencing the size of direct foreign investment. An econometric model was conceived from the statistical data covering 19 developing economies that allows estimation of influence from different factors onto the net inflows of direct foreign investments. Dwelling on existing economic theories that describe the economic nature of direct foreign investments, two groups of influence factors were discovered, namely: a group of macroeconomic factors and a group of factors linked to general societal development (11 factors in total). In conclusion, the authors reflect upon the degree and the direction of influence that the macroeconomic and societal development factors have on the net amount of direct foreign investment.