Influence of Foreign Direct Investment On Sustainable Development

The role of foreign direct investment (FDI) in achieving sustainable development has become increasingly significant, especially in transition economies such as Lithuania. Given the dual challenges of economic modernization and environmental sustainability, assessing the impact of FDI is essential. This study aims to evaluate the influence of FDI on economic, social, and environmental indicators of sustainable development in Lithuania over the period 2014–2023, with additional insights from Q1–Q3 of 2024. The research methodology involves a descriptive statistical analysis of dynamic time series, correlation-regression modeling, and international comparisons. Data sources include the official statistical portal of Lithuania, Eurostat, and various policy and investment climate reports. The results reveal that accumulated FDI in Lithuania increased by 170%, and FDI per capita grew by 172.9% over the ten-year period. High positive correlations were identified between FDI and key economic indicators: GDP (r = 0.9782), industrial production (r = 0.9441), and exports (r = 0.9600). Social outcomes also improved markedly, with average monthly earnings increasing by 184.3%, absolute poverty falling from 14.9% to 6.5%, and gross per capita income rising by 188.4%. While environmental outcomes deteriorated moderately, greenhouse gas emissions rose by 63.3% and hazardous waste by 31.5%, the correlations with FDI remained weak to moderate, indicating a relatively limited adverse environmental impact. Overall, the study confirms that FDI has substantially contributed to Lithuania’s economic and social progress, though further policy refinements are needed to align FDI with long-term environmental sustainability goals.