Trends and global practices in attracting foreign direct investment

This paper examines the contemporary trends and future prospects of foreign direct investment (FDI) flows in the context of increasing global instability and economic risks. The relevance of this study is underscored by the profound impacts of the COVID-19 pandemic, geopolitical tensions and the introduction of global tax reforms on FDI dynamics. The primary objective is to analyze the shifts in FDI flows from 2000 to 2023, identifying key factors influencing these changes, particularly during crises such as the 2008-2009 economic downturn, the COVID-19 pandemic and the ongoing conflict in Ukraine. The methodology is grounded in quantitative analysis of FDI data sourced from UNCTAD and OECD databases, supplemented by comparative and dynamic analyses based on global investment reports and indices of FDI confidence. The scientific novelty of the paper lies in the synthesis of data on FDI in the context of increasing global uncertainty and the changing strategies of investing and recipient countries. It emphasizes emerging factors, including the implementation of global minimum taxes, the rise of digital and green investments and the reassessment of developing economies as viable investment destinations. The findings reveal that global FDI flows remain volatile, significantly influenced by various external factors. Despite a recovery post-pandemic, the current geopolitical and economic landscape - exemplified by the conflict in Ukraine and global tax reforms - continues to reshape investment strategies and capital flows. Developing economies are increasingly pivotal in attracting FDI, particularly in sectors aligned with sustainable development and digitalization. Recommendations for recipient countries include enhancing legislative and financial frameworks to attract green and sustainable investments. Developed nations are advised to focus on creating conditions for localizing production, reducing global supply chains and lowering tax barriers. In light of the growing significance of digital technologies, it is crucial for countries to advance national programs supporting digitalization and technological innovation. This study contributes to a deeper understanding of FDI trends in a rapidly changing economic environment offering valuable insights for policymakers and stakeholders in both developed and developing nations.