Ways of Increasing the Efficiency of Attracting Foreign Investments in the National Economy

In the emerging and transitional economies, foreign direct investment (FDI) has emerged as a key capital formation, structural modernization and export competitiveness tool. Reform and opening up of the sector in the national context under analysis led to a rise in the contribution of foreign-capital inflows to the fixed capital formation, industrial upgrading and firm development. Although FDI inflows have significantly increased, little scholarly interest has been given to the efficiency aspect of foreign investment attraction especially in assessing the conversion of inflows in structural rather than quantitative growth. In this research, the efficiency of foreign investment attraction is evaluated in terms of its correlation with the export performance, the value added to the industry, and dynamics within the enterprises in the years of 2017-2024. Empirical evidence demonstrates that there are significant increases in the share of foreign investment in fixed capital formation and in the number of foreign-capital enterprises with positive export growth meaning that FDI helped in modernization and increased external competitiveness. The paper introduces an efficiency-oriented approach to the subject, which broadly focuses on the spillovers of FDI, and its structural impact, focusing on the absorptive capacity, institutional quality, and sectoral distribution. Policy implications of the findings include the emphasis of policy frameworks on the quality of investment, connections between multinational firms and the local firms, and specific facilitating mechanisms to ensure the developmental benefits are maximized. The findings also suggest that the results of the efficiency are still conditional and should be further investigated using the econometric models and sector-level or cross-country comparisons to investigate the threshold conditions and the long-term competitiveness consequences.