The impact of direct foreign investment on international trade in Lithuania

Abstract

Direct foreign investment, regarded as one of the factors of economic development, has always been considered an important condition, encouraging productivity, international trade and economic growth. Under the conditions of globalisation, direct foreign investment is becoming one of the most im-portant factors, determining economic integration of the country in global markets. The volume of direct foreign investment in the country reveals attractiveness of the country for international market and eco-nomic relations with other countries that determine the volume of international trade. Direct foreign in-vestment enables reduction of the lack of capital or other resources and provides the access to advanced technologies, new market niches for a particular product and innovative work organization and manage-ment methods. Despite that, scientific literature proposes different explanations of the benefits of direct foreign investment. Possible influence and links between direct foreign investment and international trade (export and import) is still being debated.