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The role of foreign direct investment in the national economy and correlation analysis

Author

Listed:
  • Ramin TSINARIDZE

    (Batumi Shota Rustaveli State University, Batumi, Georgia)

  • Nino MAKHARADZE

    (Batumi Shota Rustaveli State University, Batumi, Georgia)

Abstract

Objectives: World trends point to the importance of FDI. It directly or indirectly affects the economy and all other industries. Foreign investment has a significant impact on the development of both economic and intangible values. The main goal the task of scientific work is to study the impact of foreign direct investment. Methods/Approach: FDI statistics in the world and in Georgia, studies and correlations will allow us to analyze the pace of development of Georgia's investment environment, its advantages and disadvantages. Results: A correlation has been established between foreign direct investment and employment, gross domestic product and export-import. The correlation between foreign direct investment and employment is strong, which is logical due to the strong impact on employment. The weakest connection is with imports and exports. In this regard, it is interesting to note that an increase in foreign direct investment also leads to an increase in the level of employment. We have studied the compatibility of Georgian business and foreign investment. Conclusions: International experience and trends in Georgia show that FDI is one of the main drivers of solving socio-economic problems. The investment environment is connected with all important sectors and directions of the country. Despite the global pandemic and the difficult economic situation of Georgia, as a result of the implementation of important regulations, it will be possible to improve the economy through foreign direct investment.

Suggested Citation

  • Ramin TSINARIDZE & Nino MAKHARADZE, 2023. "The role of foreign direct investment in the national economy and correlation analysis," Access Journal, Access Press Publishing House, vol. 4(1), pages 46-59, October.
    • Handle: RePEc:aip:access:v:4:y:2023:i:1:p:46-59
    DOI: 10.46656/access.2023.4.1(4)
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    More about this item

    Keywords

    Foreign Direct Investment; employment; correlation; gross domestic product; export-import; pandemic impact and regulation;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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