The role of investment promotion in attracting FDI: evidence from the Baltic States

Abstract

The article explores investment promotion effect on FDI flows in a country. The first part of the article analyses the scientific literature on the interconnection between investment promotion and the determinants of FDI. Three Baltic States are chosen for the purpose of empirical analysis. Three main tools for investment promotion are highlighted. In order to determine the impact of FDI determinants on FDI flows and the role of investment promotion among them, three multiple criteria methods are used. The analysis has confirmed the theoretical statements that investment promotion influences FDI flows. Investment promotion has strong effect on FDI on condition that investment promotion is introduced in full.