PMA - A New Framework for Assessing FDI Attractiveness

FDI is a very important factor for every national economy. Inward FDI increases job opportunities in the target country, which helps counter-fighting unemployment, a very hot issue in the contemporary world. Furthermore, inward FDI is a positive flow of money helping to improve the country's balance of payments (BoP). The importance of FDI in contemporary international economics leads to thorough research for the characteristics, which attract foreign investors, the so-called ¿FDI-determinants¿. But the FDI decision is a very complex procedure, based upon data, facts, incidents, characteristics, perceptions etc. This complexity makes the tracking and identification of the FDI-determinants also a very complex issue. Moreover, the FDI involves two main actors: The investor who searches for the best possible destination for his investment, and the countries' policymakers, who try to attract as much foreign capital as possible. This paper suggests a new framework accompanied by a model that helps to prioritize and assess the case-relevant determinants. The tool¿s aim is to help potential investors and policy-makers to their FDI related decisions.