Foreign Direct Investments Impact on Economic Growth in Developing Countries
Foreign Direct Investments Impact on Economic Growth in Developing Countries

Summary/Abstract: In today's world, globalization and the integration of economic ties are taking place intensively, and capital mobility is increasing. However, international practice shows that foreign investment can have both positive and negative effects on the country's economy. In this paper, the author examines the effects of foreign direct investment in the economy of the Russian Federation on the basis of testing two hypotheses on the basis of statistical analysis and macroeconomic modeling. The first is related to the assessment of the economic impact on the donor country based on the modified difference model of the multiplier-accelerator. The second hypothesis is based on a test of the impact of foreign investment on the host economy, based on the elasticity of external and domestic investment flows. The study identifies several target groups for analysis: regions that are active donors of investments and regions in which foreign investment flows are low. The comparison of the effects of foreign investment in these target groups allowed the author to give a more accurate description of the hypotheses about the nature of the consequences of foreign investment in the regions of the Russian Federation.

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