Foreign direct investment and economic growth of the state

Particularly foreign direct investment (FDI) flows more between Member States and amongst Member States and non-Member States although FDI is more significant for the host countries because it usually includes knowledge and technology transfers. Since joining the European Union the new Member States become part of the common market and therefore FDI inflows increases. As an opportunity to receive new technologies and innovations foregoing direct investment is important for these states to enhance their competitiveness. The article presents FDI analysis of new Member States in the context of the European Union. The author also strives to estimate the role of FDI in the overall economy.