The impact of foreign direct investment on economic growth

Abstract

In many countries, the attraction of foreign direct investment (FDI) contributes significantly to the business development and economic growth and, in fact, FDI is the key driver of economic growth. Because of that the study analyses FDI and the purpose of the article is to evaluate the influence of FDI on the economic growth of Lithuania. In order to reach the purpose of the article the following objectives are set: to base the impact of FDI on economic growth, to describe the methods of data analysis of the impact of FDI on economic growth and to establish the relationship between FDI and economic growth using empirical research methods. In the current study, the following research methods are applied: scientific literature analysis, correlation analysis and multiple regression analysis. The obtained results showed that FDI directly contributes to economic growth through bigger capital and newer technologies.