Foreign direct investment policy as an instrument for sustainable economic growth: a case of Ireland

Abstract

It is scientifically proved that foreign direct investments (FDI) are one of the life-forces for economic growth. Foreign investors use local labour, capital, and natural resources that are constantly running out and limited. However, global companies that translocate their production process often devastate the nature of the host country. Decline of natural resources and climate changes forces to think about how people could develop country’s economy and social welfare, but at the same time save nature and its resources. Global companies are the main developers of economy and social welfare, but also, they are environment polluters. The value of sustainable development is quite obvious, but there is a lack of research about the relationship between FDI and sustainable development in the literature. The literature separately analyses the problem of sustainable development or FDI impact on economic development. Often, FDI is described by determining the effects, but it does not address the question of expedient foreign capital, which would provide the greatest benefit to the host country. The article analyses the influence of foreign direct investments (FDI) on sustainable development. It develops the concept of sustainable investment. It aims to find out whether the purposively formed foreign direct investment policy can ensure the sustainability of economic development. In this case, FDI can become an instrument for the implementation of sustainable development. This study is about Ireland case. The choice is not coincidental. Since this country applied FDI policy, it was able to transform the economy rapidly, and also it became one of the most developed countries in Europe. The authors of the research chose ten economic, social, and environmental factors that define sustainable growth. The analysis revealed the contact between the indicators of FDI and sustainable growth in different periods of the economic cycle.