OIDA International Journal of Sustainable Development
Open-access peer-reviewed journal
https://doi.org/10.64211/oidaijsd190612
Models of Attracting and Retaining Foreign Direct Investment in the Context of Political and Economic Instability
Dymytrii Grytsyshen 1*, Oleksandr Somak 2, Nataliia Smentyna 3, Anastasiia Fialkovska 4, Tetiana Borodenko 5
1 Zhytomyr Polytechnic State University, Zhytomyr, Ukraine.
2 Department of National Security, Public Administration and Administration, Zhytomyr Polytechnic State University, Zhytomyr, Ukraine.
3,4 Department of Economics and Finances, Educational and Scientific Institute of Maritime Business, Odessa National Maritime University, Odesa, Ukraine.
5 Department of Finance named after Viktor Fedosov, Faculty of Finance, Kyiv National Economic University named after Vadym Hetman, Kyiv, Ukraine.
* Corresponding authour: gritsishen.do@gmail.com
Volume 19, Issue 06, Pg. 161-172, 2026
Abstract: Foreign direct investment remains a key factor in the economic development and recovery of countries experiencing political or economic crises. The relevance of the study is driven by the need to identify strategies that ensure the sustainability of investment flows in the face of risks associated with wars, corruption, macroeconomic imbalances, and regulatory unpredictability. The purpose of the study is to assess the effectiveness of investment strategies in politically and economically unstable regions, and the object is the mechanisms for attracting and retaining Foreign Direct Investment (further – FDI). The methodology is based on the analysis of time series of key indicators (FDI volume, number of new projects, integrated sustainability index), calculation of increments and differences, and comparison with international practices and reports of international organizations. The results showed an increase in FDI by 27.7% in 2021-2024, an increase in the number of new projects by 41.5%, and an increase in the sustainability index by 31.3%, which indicates a consistent increase in the quality component of investment flows even in crisis conditions. A comparative analysis with the work of other authors has shown that FDI sustainability is ensured not only by the quality of institutions but also by the development of innovation clusters, digital infrastructures, and corporate risk diversification strategies. The practical significance of the study lies in the formulation of recommendations for governments on post-crisis recovery and transparency policies, and for investors to diversify their portfolios, insure risks, and strengthen partnerships with stakeholders. The novelty lies in the comprehensive combination of quantitative analysis with international approaches, which allows us to assess the volume and sustainability of investment strategies in a turbulent environment. The results of the study can be used in the development of state policies for attracting FDI, in the practice of international organizations and in the strategic planning of transnational corporations. What makes this study stand out is the way the author brings together three seemingly separate layers – institutional, macroeconomic, and corporate – into one cohesive framework for looking at the sustainability of foreign direct investment (FDI). Unlike earlier studies that zoomed in on just one angle (usually either institutions or the economy at large), this work takes a more hands-on route. It offers a practical model that actually ties political and economic risks to concrete performance metrics – like how much FDI is coming in, how projects are evolving, and how stable the overall picture looks. And there’s more. A fresh twist in this paper is the comparative angle: it suggests that in turbulent times, innovation clusters and solid digital infrastructure can act as a sort of shock absorber – softening the blow and helping to keep those investment streams from drying up. It’s not just theory for theory’s sake; it’s trying to point out real-world levers that might just help unstable economies stay afloat.
Keywords: digitalization, innovation clusters, institutional quality, macroeconomic factors, risk management strategy.
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