| Abstract [eng] |
The main objective of this thesis is to identify the key factors influencing the inflow of foreign direct investment (FDI) in the Baltic States - Lithuania, Latvia and Estonia. To achieve this goal, the study includes both theoretical and empirical analyses. The theoretical part provides a comprehensive overview of FDI concepts, classifications and theoretical frameworks. This includes the definition of the elements of FDI, its economic significance and its motivating factors. The study also presents the gravity model as a methodological framework for analyzing FDI determinants. The research focuses on identifying and evaluating the most significant factors influencing FDI, such as market size, infrastructure development, institutional stability and others. In the empirical analysis, statistical and econometric methods are used to examine the determinants of FDI in the period 2000-2022. Key methods include descriptive statistics, LASSO regression for model optimization and Poisson pseudo maximum likelihood (PPML) estimation to analyze significant variables affecting FDI. Key findings include: - Economic factors such as market size, infrastructure and institutional quality play a decisive role in attracting foreign direct investment in the Baltic states. - There are sector-specific differences, highlighting the need for tailored policy approaches for different industries. - The study also shows that historical and geopolitical factors uniquely influence FDI patterns in this region. In conclusion, the research provides valuable insights into FDI trends in the Baltic states and recommendations for policymakers to improve their FDI strategies. By understanding the determinants of FDI, policymakers can implement targeted measures to enhance the investment climate and foster sustainable economic development. Future research could focus on integrating additional variables and expanding the time frame to further refine the understanding of FDI dynamics. Expanding the scope of analysis to include more comprehensive data or alternative econometric approaches may yield deeper insights into FDI trends in the Baltic region. |
