Tiesioginių užsienio investicijų srautų pokyčiai ekonominės krizės sąlygomis
The variations of foreign direct investment flows under the conditions of global economic crisis

Summary/Abstract: The first signs of the global financial crisis occurred in mid- 2007 with ever-growing financial mortgage defaults in the USA. Money market crisis began in 2008. The stock market slump, large financial institutions have collapsed or been redeemed by states. Governments around the world had to choose the techniques of redemption to save their financial systems. Not only the private financial institutions (such as “Lehman Brothers” and “Morgan Stanley”) and the nations (e.g., Iceland) wind up on the brink of bankruptcy. Financial institutions have been forced to raise capital and to deal with liquidity problems by reducing the cross-border bank lending and reducing the investment portfolio. Initial public offerings had been delayed in the international financial market. Financial crisis coincided with a structural crisis in the global economy. Industries that have thrived in good economic times for quite a long period and developed considerable excess capacity, falling into a deep recession when the global demand started to weaken. The financial crisis has coincided with the third stage of the economic cycle, i.e., the economic recession period. This resulted in a particularly negative impact of the crisis to the global economy. Foreign direct investments not only financial resources, new technologies, access to markets, but also is a value of an industry and its function. Many economies, including Lithuania, are still heavily dependent on FDI flows. The object of the research is foreign direct investment flows. The aim of the research is to traverse the variations of foreign direct investment flows in the world and Lithuania under the global economic crisis conditions. The tasks of the research are: 1. to describe the variations of foreign direct investment flows; 2. to reveal the influence of foreign direct investment to the new EU member states economies; 3. to assess a decline in foreign direct investment to government policies; 4. to describe the structure and the variations of foreign direct investment in Lithuania. Global FDI flows have declined by 15 percent. In developed countries, foreign direct investment declined by one third. Developing economies faced the shocks later. FDI in developing countries has dramatically declined in the first 2009 quarter. A decline of foreign Direct Investment was deepening in the three economic groups. FDI has increased not only the new EU Member States' financial resources, increased investment in technology development, has accelerated the transition to a market economy, and also contributed to strengthening the private sector and emerging market economies, removing macroeconomic distortions inherited from the former centrally planned system, have contributed to speeding up industrial restructuring, accelerate the export development and the inclusion of countries to the international division of labor. FDI decline has a significant impact on government policy. Government is facing large - scale redundancies and falling tax base. Governments are forced to compete more effectively, forced to implement structural reforms to ensure greater stability in global financial system and strengthen the macroeconomic foundations. Foreign direct investments to Lithuania were the fastest growing from Latvia, the Netherlands, Sweden and Norway in recent years. Most foreign direct investments increased in real estate, renting and business activities, transport and storage, recreation, cultural and sporting activities. FDI decreased in manufacturing, electricity, gas and water supply enterprises. FDI by county analysis reveals regional imbalance issue in Lithuania. Most foreign direct investments fell in Vilnius, Kaunas and Klaipeda districts. Based on projections carried out by Trend model the direct foreign investment will grow. The forecasts are quite optimistic and coming global trends. FDI inflows of 2008 in Lithuania will be by 2011, and in the next year, FDI should increase. After the analysis of the Lithuanian foreign direct structure could be suggested that FDI in Lithuania obey to the global trend and is significantly reduced in 2009. Accordingly, the decrease is in FDI per capita. Overall impact of FDI on Lithuania's economy is positive. FDI is generally effective in the services sector, promotes economic development, but not all foreign investment flows have a positive impact. Foreign direct investments in the services sector are generally effective, promote economic development, but not all foreign investment flows have a positive impact. Foreign capital is considered one of the main factors influencing the restructuring of the economy. In order to enhance the competitiveness in the integrated EU market, it is necessary to promote the development and deployment of new technologies and to develop innovative activities to attract FDI in high technology sectors.

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