Research on Influence of Foreign Direct Investment on Sustainable Development of a Country

The study investigates the influence of foreign direct investment (FDI) on the sustainable development of OECD countries by applying a comprehensive quantitative methodology. Statistical data from nine countries with different levels of achievement in the SDGs Index between 2000 and 2022 were analyzed. 17 indicators corresponding to the SDGs are utilized: one indicator for each SDG. Three countries with the highest SDG Index scores (Finland, Denmark, and Sweden), three with average scores (Belgium, Japan, and Portugal), and three with the lowest scores (Turkey, Mexico, and Colombia) have been included in the analysis. It ensures a comprehensive view of countries at different levels of sustainable development. Descriptive statistics were employed to assess the distribution and variation of sustainability indicators, while correlation analysis revealed the strength and direction of linear relationships between FDI inflows and key economic, social, and environmental variables. Pairwise regression models were used to estimate the significance and explanatory power of FDI in relation to sustainable development indicators. The correlation analysis has shown that there is no relationship between FDI and indicators of sustainable development in Finland, Denmark and Sweden, as the correlation coefficients are insignificant. The FDI has an impact on various sustainable development indicators of only 4 countries out of 9 selected: 2 countries with the average SDGs Index results (Belgium and Japan), the other ones are the countries with the lowest SDGs Index achievement (Turkey and Colombia). FDI has a significant impact on almost all of the selected sustainable development indicators only in Colombia. Although, FDI has a substantial and important role in achieving sustainable development and SDGs, the sample's groups show that the majority of the explanatory factors are statistically insignificant for some countries. Forecasting techniques further highlighted potential long-term trends, confirming that FDI can act as a catalyst for sustainable development only under favorable institutional and policy frameworks.