DIRECTIONS FOR ENHANCING THE MODELING OF FOREIGN DIRECT INVESTMENT'S IMPACT ON ECONOMIC DEVELOPMENT
Abstract
The article examines the foundations of the formation of modern models of the impact of foreign direct investments (FDI) on economic growth and carries out a comparative analysis of the latter. The urgency of scientific research in this direction is due to new challenges faced by economists, politicians, and public figures in connection with large-scale and complex changes in the system of international economic cooperation. The growth of geopolitical tension, a series of crises in world commodity markets, and the consequences of the war in Ukraine have caused the fragmentation of international flows of foreign capital. These factors have already led to significant changes in the behavior of foreign investors, who are forced to take into account new dividing lines between regions of the world, respond to restrictions in access to markets, as well as protectionist measures introduced by the governments of national states. Global economic uncertainty forces investors to review their own priorities regarding the selection of sectors and objects for capital investments. Based on this, with the help of complex methods of analysis and synthesis, a study of the theoretical foundations of existing models was carried out and their empirical comparison was conducted. The results of this comparison made it possible to classify the models depending on the completeness of their consideration of the role of FDI as a tool for introducing innovations, as well as on the level of discretization of the subject of analysis within models. In addition, the effectiveness of various models was evaluated in the context of their ability to predict the long-term economic consequences of FDI. This comprehensive evaluation made it possible to identify promising directions for further research and suggest possible ways of improving existing approaches. Moreover, the findings highlight the need for dynamic and adaptable models that can better capture the evolving nature of global economic interactions and investor behavior in the face of continuous geopolitical and economic shifts. In light of these insights, it becomes imperative to develop methodologies that are not only robust but also flexible enough to accommodate the complexities of the ever-changing global economic landscape.
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