The Role of Foreign Direct Investment in International Finance

Abstract

Research of investment processes - one of the main development thrusts of modern economic science. Nowadays a great number of research works are devoted to the impact of different economic and institutional factors on investments in general and on the volume of the attracted foreign direct investment (FDI) in particular. The final goal of all these studies (in respect to institutional factors) is the answer to the question about the future government policy in terms of volume increase of the attracted foreign direct investment. In the meantime, a significant part of the data in the reports, created by the group ”Doing Business” of the World bank, in relation to investment activities and FDI, remains unconsidered. The article provides a general definition of foreign direct investments, presents their classification. The mechanisms and causes of foreign direct investments is identified. At a result regulation of foreign direct investments is analyzed.