Page 14 - Theoretical and Practical Interpretation of Investment Attractiveness

in a country or its regions with high potential, carry out effective activities there and receive
the necessary profit (income).
The accumulation of basic knowledge and innovation in the centers, the convenient
location of production forces, and the presence of highly infrastructural facilities in most cases
ensure a high flow of investment into these regions. On the contrary, in socio-economically
poor and environmentally poor areas there is an increase in social tension, an increase in
various types of crimes, and the emergence of religious and even political conflicts. Most
investors do not risk investing in such areas. To exclude the occurrence of these negative
situations and prevent them, the state is pursuing a regional-territorial policy.
In order to correctly and rationally solve the goal of this study and the scientific,
theoretical, methodological and practical tasks set to achieve it, it is necessary to find answers
to the following questions:
- What factors determine the attractiveness of a country’s investment environment?
- What determines the attractiveness of the investment environment?
- what policy should the state pursue to ensure uniform development of the regions?
- What factors ensure the influx of direct investment and what is the level of their
influence?
- In what areas is it permissible to locate production forces in economically efficient
areas?
- What are the causes and factors of economic growth and regional development?
Based on the above questions , the science of the economy of place > country >
territory > region has arisen and is developing .
It is known that the exact methodology for assessing the investment attractiveness of a
country is not defined by any international law, therefore, recently various methods have been
used to calculate indicators of investment attractiveness. According to some economists,
investment attractiveness is determined by the level of income from investments. This
approach covers a very narrow scope, since in order to obtain clear and correct results,
investments must be made at the same level of risk (hazard), which is practically impossible
in practice.
Therefore, there are a number of additional points based on the determination of
investment attractiveness, based on an analysis of the volume of investments and their
horizontal and vertical structure. We can draw a conclusion about the favorable (unfavorable)
state of the territory. The main disadvantage of this approach is that it treats the investment
process superficially. Individual descriptions of investments do not reflect the real state of the
investment sector and do not reflect the internal capabilities and prospects of the country.
In addition, there are widespread views that define investment attractiveness as a set
of socio-political, natural-economic and psychological characteristics. This investment
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attractiveness methodology, which Euromoney uses, consists of nine different indicators .
These are: economic efficiency, political risk, debt, debt coverage (default or extension of

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http://www.euromoney.com

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