The Factors of Competitiveness Attracting Foreign Direct Investments

Institutional development must be a determinant of extreme importance for the inflow of foreign direct investments. Companies from developed countries performing in countries in transition may high costs of business operations and transactions, lack of information about partners, blurred legal regulations, and underdeveloped administrative and legal system and corruption due to the underdevelopment of institutions, that is, facing the factors that are not the practice in the markets of developed countries. These factors increase costs and hamper their business. In order to attract foreign direct investment, the development of politicized, control, sluggish and inefficient administration into professional, efficient administration service has become one of the priority tasks of reform. A country that does not establish the rule of law and raise the quality of regulation and solve political instability cannot count on progress.