Impact of European Union structural funds support allocated to different economic sectors on foreign direct investment: evidence from Lithuania

Abstract

In pursuance of economic growth, developing countries are seeking to attract foreign direct investment. The European Union structural fund supports the economic growth of the less developed countries in order to reduce the gap between the member states, while foreign direct investment is referred to as one of the European Unions funding objectives. The topic is relevant because after the current European Unions 20142020 funding period, the financing conditions for the future will change and this raises a lot of unanswered questions regarding the funding period, funding flows and conditions. The aim of the work is to evaluate the impact of European Unions structural funds on foreign direct investment in selected sectors of Lithuania and to analyse the change of foreign direct investment by changing the flow of funding of the European Union structural funds. The hypothesis any change of EU structural funds supports in different economic sectors of a country has an impact on the country's FDI flows is confirmed by the study. The methods used for hypotheses testing are correlation analysis and logistic regression analysis. The limitation of the study is that tot all the economic sectors were taken into account and the agricultural sector is not analysed.