Foreign direct investments in Lithuania's regions

Abstract

Foreign Direct investment has been an interesting topic in the social sciences for a long time. Most of the contemporary research is focused on state or country level analysis of FDI. This thesis goes into a deeper level of FDI, analyzing regional factors, which are most important to attracting FDI in a municipality. The question that I rise, is does the potential of Lithuania’s regions is fully used to attract the most FDI. If not, what are the factors that regions should focus on, develop a strategy to, for using most of the benefits that FDI presents. From the literacy review we can conclude that FDI affects local salaries, innovation levels, raises the economical state of a municipality. My objective is to find out what factors correlate with FDI attraction, and which ones are the most important in the regional level of FDI. The research shows that the potential of Lithuania’s municipality has not been fully used (Damašienė, Cibulskienė, Butkus 2004) to achieve the most FDI. In the data analysis research the most important factors which are needed to attract FDI have been seen as few: amount of people in the region, if a region has a highway, if a region has a university and the amount of FDI per capita in a region. But the most important factor which affects the FDI attraction into a region is the amount of people in a region. In conclusion I argue that even thou, the situation is only getting better in the economy, Lithuania has still a lot to go, to have results of FDI in smaller regions. The opportunity is already there, as the advisor to the prime minister said, there is going to be a wave of FDI in the world after the pandemic, and it is going to be there for the taking (Lukas Savickas 2020). I also mention about what more could have done, which factors could have been added in the research to have even better results.