FINANCIAL ANALYSIS OF FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH OF DEVELOPING COUNTRIES
The object of the research paper is to perform an empirical analysis of foreign direct investment (FDI) inﬂuence on economic growth with the aim of establishing factors that will contribute to overcoming the problem. The research results imply that realistic exchange rate, export and import as well as state expenditures are statistically signifcant for predicting economic growth movement and they have a positive inﬂuence on FDI movement. Empirical analysis, contrary to expectations, has shown that FDI, public debt and openness have a negative impact on economic growth in the case of Republic of Serbia. In the following period Serbia has to decrease the share of budget defcit in GDP and control public debt. Serbia has to pay special attention to improving investment environment and encourage export oriented production, whereas fnance management and continuation of reform processes are the basis for establishing sustainable development of country, with sustainable use of available resources.
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