INNOVATIVE SOLUTIONS FOR ECONOMIC GROWTH: EXPLORING THE IMPACT OF ECONOMIC FREEDOMS ON FOREIGN DIRECT INVESTMENT ATTRACTION

Anđelka Štilić; Andrea  Mastilo; Krsto  Vuković; Dejan Mastilo

doi:10.2478/eoik-2023-0013

Authors

Anđelka Štilić Academy of Applied Studies Belgrade, The College of Tourism, Belgrade, Serbia
Andrea Mastilo Student of Economics at Royal Russell London, London, United Kingdom
Krsto Vuković Economics and Finance, Queen Mary University of London, London, United Kingdom
Dejan Mastilo Oikos Institute Research Center Bijeljina, Bijeljina, Bosnia and Herzegovina

DOI:

https://doi.org/10.2478/eoik-2023-0013

Keywords:

economic freedoms, gross domestic product, GDP per capita, foreign direct investments, growth, employment

Abstract

Economic freedoms are essential for the growth and development of countries, but their distribution varies across nations, resulting in differences in economic growth. This study aims to explore the impact of economic freedoms on economic growth, measured by gross domestic product (GDP) per capita and foreign direct investment (FDI) inflow, by examining the influence of institutional quality. Economic freedom indicators were obtained from the 2022 report by the Heritage Foundation, and GDP per capita and FDI indicators were sourced from the World Bank report. This study employs multivariate regression analysis to
investigate the relationship between economic freedoms and economic growth. The findings suggest that economic freedoms have a positive effect on both GDP per capita growth and FDI inflow. Government integrity was found to be the primary indicator for GDP per capita growth, while Business freedom was identified as the key factor in attracting FDI. The implications of these results are significant, as they can inform policy decisions aimed at improving the standard of living by increasing GDP per capita and creating employment opportunities through FDI.

Author Biographies

Anđelka Štilić, Academy of Applied Studies Belgrade, The College of Tourism, Belgrade, Serbia

Andrea Mastilo, Student of Economics at Royal Russell London, London, United Kingdom

Krsto Vuković, Economics and Finance, Queen Mary University of London, London, United Kingdom

Dejan Mastilo, Oikos Institute Research Center Bijeljina, Bijeljina, Bosnia and Herzegovina

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