Analysis of investment attractiveness of the Georgian regions

This following paper analyzes the investment environment in the regions of Georgia. The analysis outlines several variables that affect the investment attractiveness of the regions. The variables, which are categories of a specific field, are combined into relatively larger groups called micro-climates. These micro-climates are human resources, technical infrastructure, market size, economic indicators and administration. Micro-climates cover economic, demographic, political and technical areas to make the analysis as comprehensive as possible. The latter necessitated due to the various dimensions of the topic. Attracting investment is not a linear and one-time process or result, however, it requires the consideration of dozens of variables, processes and calculations. The paper firstly examined relevant scientific literature regarding predicting variables. Mostly, as the following paper demonstrated, scientists describe infrastructural component as the core one for the investment attractiveness. Additionally, there are other predicting variables, such as, market size and business environment, which are compounded by political, social and legal aspects. The paper uses data of the National Statistics Office of Georgia, the World Bank and the World Monetary Fund, which are analyzed in the first stage by Pearson Correlation Coefficient, followed by stepwise regression analysis. This approach became necessary in order to initially identify the impact and correlation of each category on Foreign Direct Investments and later observe the most important categories, both in terms of impact weight and frequency. Finally, after analyzing both methods, it became possible to distinguish important categories affecting the investment environment by regions. Based on the selected data, results demonstrated that in the regions of Georgia, technical infrastructure, spread of the Law On the Development of High Mountainous Regions and business environment have the most significant impact on the formation of the investment environment.
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Investment environment, foreign direct investment, regional
Economics and Business, №2, 2021, pp. 69-82