Finding the Determinants of FDI Inflows to EU Member States

In the last two decades world economy has seen an extensive inflow of foreign direct investment into economic development of countries. More and more countries are competing with each other to attract this investment as an alternative economic growth accelerator. Thus it is important to understand the values and factors determining the choices of investors. The aim of this study is to identify the main determinants which have impact on foreign direct investments in European Union member states. The important issue is structural investments in the economy of member states. Current research on this topic indicates the correlation among intensity of structural support and foreign direct investments flow to the economies of member states. Panel data analysis of European Union member states is performed in this paper. It shows that macroeconomic development, trade and other economic indicators are related with foreign direct investments inflows to European Union member states. Also, the regulatory framework of European Union is evaluated in terms of structural investments flows. The impact of foreign direct investments inflows on economic growth on the economies of European Union countries and the impact of European structural support attracting foreign direct investments are investigated in this article.