Study of The Role and Impact of Foreign Investment on Economic Growth in Developing Countries

Abstract

The purpose of this study was to assess the impact of external financial resources on the economic development of developing countries on the example of Ukraine and Kyrgyzstan. The study analysed the key channels of influence of foreign investment on various sectors of the economy. The impact of investments on industry, agriculture, and the service sector was examined. The study also analysed the economic factors that influence investment attraction. Particular attention was paid to the level of legal protection of investors. The availability of reliable legal mechanisms could substantially influence the decision of foreign companies to invest. The study explored how such dependence on foreign investment could lead to economic instability. The negative impact on local enterprises was investigated. The role of public policy in optimising the attraction of foreign investment was determined, which was necessary to ensure sustainable economic development. Based on the analysis of the impact of foreign investment on economic growth in developing countries, conclusions were drawn on how such investments shape the economic structure and contribute to socio-economic development. The findings showed that foreign investment not only provides financial resources, but also facilitates the transfer of technology, knowledge, and new management practices.