THE ROLE OF INSTITUTIONAL MECHANISMS IN OPTIMIZING THE ATTRACTION OF FOREIGN INVESTMENTS
Keywords:
foreign direct investment, institutional mechanisms, institutional economics, investment climate, transaction costs, legal institutions.Abstract
This paper examines the role of the institutional environment in attracting and optimizing foreign direct investment (FDI) flows. An analysis of modern institutional theories shows that the quality of formal and informal institutions is a key factor determining a country's investment attractiveness. Empirical evidence confirms that optimizing legal, political, and economic mechanisms can reduce risks, transaction costs, and create sustainable incentives for foreign investors.
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