EVOLUTION OF DIRECT FOREIGN INVESTMENT IN DIGITAL ECONOMY

Анотація

Effects of digital economy on the forms and stimuli of foreign direct investment are examined. Since digitalization is becoming the underlying basis of a fundamentally new technological structure for economic processes, it shifts business models, strategies and decisions on international activity and foreign expansion. Digital economy disrupted conventional industries and interaction between market participants. The purpose of the article is the generalization of the theoretical foundations of digitalization as a factor in the evolution of FDI and assessment of modification of their forms at the macro and macro levels. Methodological basis of the study are general scientific tools (system analysis, deduction and induction), as well as special economic methods (statistical and correlation-regression analysis). Investment strategies of digital companies and the impact of digital economy on firms in inherently non-digital industries are disclosed. The role of digitalization for global market competition and the corresponding changes in investment strategies are revealed. Digitized firms obtain competitive advantages resulting from cost effectiveness, asset-light production and organization models and agility, which entails the surge of their market power and affects their investment activity.The study argues that the extent of digital penetration in household and business use, combined with FDI into digital sector, determine the scope of digital economy, which equals the share of the domestic value added generated by digitalized firms. Such companies have digitalization influence their investment decisions and strategies, mainly in more digitalized developed economies. Recommendations for investment policy of economic agents at the micro and macro levels, with regard of digitalization factor, are justified.

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