Foreign Direct Investment

The main aim of this study is to analyze the relationship between foreign direct investment and R&D spending using panel co-integration methods for upper middle-income economies and high-income economies. A larger level of investment is needed to increase the capital stock in order to ensure growth, but the typically low savings rate makes this difficult to achieve. Theoretically, it is expected that foreign direct investments would solve the saving inadequacy problem of the target country leading to economic growth by increasing capital accumulation.

The case-study analyses the main economic conditions of the EU from points of view of emphasizing the employment, human resource management at EU-27 level. The different unemployment levels of EU member states stimulated the increasing gap between member states in GDP per capita, which was from 44% to 271% of the EU-27 average at the beginning of 2011. The unemployment rate of EU-27 increased from 6,7% in 2000 to 8,8% in 2010 based on the internal market conditions and influences of the world economic crisis after 2008.