Page 73 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.81, # 1, 2024, pp. 65-75

The candidate status is also a great responsibility for Georgia, as it is accompanied by
large-scale reforms. In turn, this implies access to financial instruments and the
possibility of attracting direct foreign investments. However, EU membership status
is not a full guarantee of financial and economic stability.

A stable macroeconomic environment is needed to attract direct foreign investments.
Fluctuations in inflation and exchange rates prevent investment. At the same time, it
is very important to have a stable political environment. Proper infrastructure, legal
framework and qualified human resources have a positive impact on the process of
attracting foreign direct investments.

Research has shown that focusing on one specific area and developing it is a guarantee
of success. However, FDI is not always desirable. Since 2019, the European Union
has started "filtering" investments, which protects countries from the inflow of risky
investments.

Export orientation plays a positive role in attracting foreign direct investment.
Countries with open economies that are united in various trade agreements or
organizations, including the European Union, are attractive to investors. The status of
a candidate member of the European Union means more freedom and openness of the
trade sphere, fewer restrictions and more opportunities. Recently, the volume of direct
foreign investments from the European Union has increased significantly, and there
are positive expectations in this direction.

REFERENCES
Apostolov, M. 2016. “Effects of foreign direct investments. Evidence from Southeast
Europe.” Cuadernos de Economía 39: 99-111 . doi:10.1016/j.cesjef.2015.10.003 .

Bank of Latvia. 2023. FDI in Latvia. Riga.
Britannica. 2023. Economy of Latvia. Riga.

Budget Office of the Parliament of Georgia. 2019. Foreign direct investment and its
determining factors. Tbilisi, 5 September.

Bujiashvili, D. 2022. How did the European Union help Georgia and why Georgia should
join the European Union. Tbilisi, 1 December.

Bujiashvili, D. 2024. The importance of candidate status and its practical benefits. Tbilisi,
22 January.

Calimanu, S. 2021. Benefits And Advantages Of Foreign Direct Investment. Montreal, 3
March.

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