STUDY OF THE IMPACT OF FOREIGN INVESTMENT ON ECONOMIC DEVELOPMENT IN EMERGING MARKETS

Abstract

In an era of intensified globalisation, sustained national development in emerging market economies increasingly hinges on the successful attraction and management of foreign investment. This study explores both the positive and negative experiences of attracting foreign direct investment (FDI) in China, Kosovo, and Uzbekistan—three countries representing diverse trajectories within the emerging market spectrum. The research employed a qualitative-comparative approach through secondary data analysis, drawing on metrics from the Doing Business rankings, the International Institute for Management Development (IMD) World Digital Competitiveness Index, and the Global Innovation Index. These tools were used to assess the dynamics of FDI inflows and outflows, their correlation with gross domestic product (GDP), and the regulatory and institutional factors shaping investment climates. The novelty of this study lies in its cross-national focus on how varying policy environments and digital competitiveness levels impact FDI attraction, offering a fresh lens on post-socialist and transition economies. The findings reveal distinct patterns: while China demonstrates strength in digital infrastructure and institutional capacity, Kosovo and Uzbekistan face challenges such as bureaucratic inefficiency and underdeveloped innovation ecosystems. Common barriers to FDI attraction ranging from legal ambiguities to limited investor protections are identified, along with best practices for overcoming them. This study contributes to the literature by synthesizing lessons from these diverse contexts, providing actionable recommendations for policymakers. It underscores the importance of not only economic liberalisation but also institutional reform, digital transformation, and regulatory transparency in creating a favorable environment for sustainable foreign investment.