A study of foreign direct investment in Armenia

Abstract

The main purpose of the paper is to analyze current condition of Foreign Direct Investments (FDI) to Armenia, discuss the major factors that affect it, find the existing gaps and offer some solutions for the improvement of FDI in the future. The pare starts with the discussion of the international experience and emphasizes some economic and political factors that are internationally recognized to influence the FDI. Then the paper tests these economic and political factors specifically for the Armenian case and shows that the international practice is not coinciding with Armenian reality. Next the paper discusses the influence of Armenian Diaspora in involving FDI, a factor that is unique and that explains Armenian case better than other factors do. The paper also discusses the opinions of experts involved in the sphere on the general advantages, disadvantages and the favorable sectors for FDI in Armenia. Finally the paper presents a set of recommendation to government on further development of Investment climate in the country for further increase in FDI flow to Armenia.