The Significance of Investment on the Development of Eastern Europe

Political and economic development is an important topic to investigate, as it plays a massive role in improving countries' productivity as it can lead to better incomes and living standards. Better incomes and living standards are imperative to combat the global inequality problem. Especially in the era of a globalized economy, recognizing the relationship between investment and development is essential; investments are a powerful force that contributes to the interdependence of national economies. Observing foreign direct investment (FDI) trends in the Eastern European countries allows us to see the regional development consequences after the collapse of state socialism. Within the Central and Eastern European region, FDI is not equal in all countries. Foreign direct investments allow developing countries to participate in the global production network, ultimately contributing to their economic growth, or does it? This paper evaluates the role that foreign financing plays in developing countries and whether it is a successful tool to aid development.