The Assessment of the Impact of Foreign Direct Investment on the Country’s Competitiveness

Abstract

The impact of foreign direct investment (further - FDI) on Lithuania’s competitiveness is analyzed and assessed in this master thesis. The impact of FDI components on the place of Lithuania in World Economic Forum Global Competitiveness Index (WEF GCI) is empirically tested through regression analysis, with the help of expert evaluation the most/ least attractive factors for FDI are identified and the recommendations how to attract more FDI are produced. In the first part the theoretical aspects of FDI are summarised, including the types and the impact of FDI, the foreign investors’ motives for FDI are identified. In the second part of master’s thesis the notions of competitiveness are introduced, three major indices which assess the competitiveness of the countries worldwide are presented. After the scientific literature analysis, it was determined the need for innovative empirical research which would assess the impact of FDI components on the place of Lithuania in one of the competitiveness indices, World Economic Forum Global Competitiveness Index (WEF GCI), and the identification of the motives which attract foreign investors to Lithuania. The third part provides the methodological guidelines for regression analysis and expert survey results. The fourth part presents and examines unique and exceptional expert survey and regression analysis results. The fifth part provides the conclusions and recommendations including the unique model from the summary of expert survey results how to attract more FDI and boost investment climate in Lithuania