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THEORETICAL FOUNDATIONS AND MECHANISMS OF
ATTRACTING FOREIGN INVESTMENT
Ochilov Bobur Bakhtiyor ugli
Senior Lecturer, Department of “International
Finance” of Tashkent State University of Economics.
E-mail: b.ochilov@tsue.uz
Orcid: 0000-0003-3568-5145
https://doi.org/10.5281/zenodo.15592799
Analysis of socio-economic changes taking place in our country shows that
the modernization of the economy, and for this purpose the active investment
policy, plays a very important role in the achievements and successes achieved.
Accordingly, it is important to create an effective system for managing the socio-
economic development of the regions of the republic, to study the theoretical
and methodological foundations for assessing the attractiveness and potential of
their investment environment. No matter which developed country we consider,
we will witness the progressive results of the trends related to the country's
economy, first of all, as a result of the soundness of the investment environment,
its attractiveness, and the rapid inflow of investment flows.
According to foreign scientist Yurii A.Rolik, investment attractiveness is a
set of characteristics that allow a potential investor to assess how attractive a
particular investment object is compared to others for the purpose of investing
available funds [1]. According to economists E.Sojli and W.Thamlar, the more
favorable the investment environment, the lower the investor's entrepreneurial
risk, and this activates the influx of investors. On the contrary, if the investment
environment is unfavorable, the risk level is high. This leads to an increase in the
costs of the investment recipient. In addition, it was noted that the state of the
investment environment is important not only for the investor, but also for the
recipient of the investment [2]
Scientist G. Svitlana in her research proved that increasing investment
attractiveness is a factor contributing to the effective functioning, development
and growth of a company in modern competitive conditions, while in
economically developed countries the investment process depends on the
influence of market conditions, sources of financing and the volume of
investments [3].
According to local economist S. Elmirzayev, companies in the country
should determine the normative ratio between dividends and reinvestment in
their dividend policy, protect the rights of minority shareholders, achieve an
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increase in share prices on the market, expand business activities, etc., which, in
turn, has a positive effect on the investment attractiveness of the country [4].
The research of the well-known scientist, economist N. Jumayev, indicates
the need to pay attention to the following in order to ensure investment
attractiveness and rational use of investment potential:
- the region's potential, aimed at increasing investment attractiveness in
order to stabilize the economy;
- accelerating investment activities aimed at innovative renewal of the
socio-economic structure;
- increasing the level of diversification and innovative investments, which
will provide the first appearance of regional research [5].
In his scientific treatises, the local economist A. Shomirov emphasized that
in attracting foreign investments, regardless of the field in which joint-stock
companies operate, it is important to allocate additional financial resources,
including the priority goal of attracting foreign investments, and in this regard,
one of the most modern methods of attracting investments in joint-stock
companies is the IPO mechanism [6].
Investment attractiveness is determined by the simultaneous influence of
the country's investment potential and the level of investment risk. Such
indicators help determine the feasibility and attractiveness of investments. The
level of investment risk is directly related to the investment environment.
The investment environment is reflected at the macroeconomic level, that
is, in the relations between the investor and specific state bodies and economic
entities. The investment environment is an objective state for any specific time
and includes a set of conditions for investing capital. However, the investment
environment is formed under the influence of the management activities of state
bodies. Therefore, the state's investment policy is one of the most important
factors. In this sense, each state has its own specific capital acceptance system
when importing capital. The worse the level of the investment environment, the
higher the investor sets his risk.
Attracting and fully utilizing foreign direct investment contributes to
increasing employment and living standards in the country, improving the
income of the population, and increasing the investment attractiveness of our
country in the international arena.
Based on the above scientific proposals and recommendations, their in-
depth study, analysis and substantiated implementation in practice will yield
results in the near future. In addition, creating a favorable investment climate in
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the country will have a positive impact on further increasing the state's
investment attractiveness.
List of used literature:
1. Yurii A.Rolik. A Complex Approach to Evaluating the Innovation Strategy of a
Company to Determine its Investment Attractiveness.// Procedia – Social and
Behavioral Sciences, Volume 99, 6 November.
2. Elvira Sojli, Wing Wah Tham, “The Impact of Foreign Government
Investments: Sovereign Wealth Fund Investments in the United States” In
Institutional Investors in Global Capital Markets. Published online: 8 March
2015; 207-243.
3. Svitlana Gutkevych. Investment Attractiveness of Industries: Features and
Trends.// Baltic Journal of Economic Studies, vol. 5, № 3, 2019. – P.9;
4. S. Elmirzayev. Analysis of dividend policy and dividend aristocrats in
developed countries.// Scientific electronic journal "International Finance and
Accounting", No. 2, 2020. – P.11.
5. Nodir Jumaev. “Ways to attract investment with assessment of investment
potential of the regions” International Journal of Economics, Commerce and
Management United Kingdom Vol. VII, Issue 2, February 2019 Licensed under
Creative Common Page 664.
6. Aziz Shomirov. “The role of ipo mechanisms in attracting investments to joint
stock companies: necessity and prospects”, International Finance and
Accounting: Vol. 2021: Iss. 1, Article 19.
