Direct foreign investments and national security: problems of investment policy

Abstract

The article is aimed at studying the dependence between the level of national security and foreign direct investments inflows on the basis of which certain directions of the state investment policy in the context of strengthening national security are determined. The basis for the analysis was data on the level of national security of a number of countries with its different levels in order to compare with data on foreign direct investments inflows in these countries. The authors determine the behavior of investors in countries involved in conflicts. It is found that the presence of threats to national security is reflected negatively on the level and trends of foreign direct investments. In turn, the behavior of investors cannot be considered unambiguously, since not all of them refuse to invest in conflicting countries. The graphic analysis of investment and macroeconomic indicators that allowed asserting the presence of their coherent dynamics and formulating the hypothesis about the dependence between foreign direct investment inflows and the level of national security is carried out. The degree of this dependence and its orientation are determined using the Granger test. The authors proposed main directions of the state investment policy aimed at ensuring national security on the basis of their calculations.