INTERNATIONAL INVESTMENT AS A FACTOR OF ECONOMIC DEVELOPMENT IN CONDITIONS OF GLOBAL INSTABILITY

Abstract

The study contributes to the academic literature by providing an integrated perspective on the evolving role of international investment under conditions of global instability and by offering practical policy insights for improving investment attractiveness and economic resilience. The article examines international investment as a key driver of economic development in the context of global geopolitical uncertainty, financial volatility, and structural transformations of the world economy. The study focuses on the role of foreign direct investment (FDI) in stimulating economic growth, enhancing productivity, facilitating technology transfer, and supporting the integration of national economies into global markets. In an environment characterized by rising geopolitical risks, trade tensions, financial shocks, and post-crisis recovery challenges, international investment dynamics are undergoing significant transformation, which requires renewed theoretical and policy-oriented analysis. The article substantiates that FDI contributes to economic development through multiple transmission channels, including capital accumulation, modernization of production capacities, innovation diffusion, human capital development, and integration into global value chains. At the same time, the effectiveness of international investment is shown to depend on the quality of the institutional environment, macroeconomic stability, regulatory predictability, financial system development, and the host country’s capacity to absorb advanced technologies and managerial practices. Special attention is devoted to the empirical analysis of investment inflows using the case of Ukraine. The dynamics of FDI inflows over the period 2002-2025 reveal high sensitivity to global financial crises, geopolitical shocks, military conflict, and pandemic-related disruptions. Periods of investment growth are associated with macroeconomic stabilization, reform efforts, and improved investor confidence, whereas sharp declines correspond to political instability, security risks, and heightened uncertainty. These findings highlight the vulnerability of international investment flows to external shocks and underscore the importance of investment risk mitigation mechanisms.