Inflow of Direct Capital to Developing Countries - Selected Economic and Legal Problems

Under the economic globalization mobility of capital, labor and goods is growing. Enterprises are dividing manufacturing process into stages located in different countries. An expansion of multinational enterprises (MNEs) follows. Below, we analyze the causes and results of the creation of branches by the enterprises originating from industrialized countries, in less developed countries. We conduct research on the nature of barriers that hinder the inflow of direct capital to the countries that lack it the most. We turn our attention to the fact, that the benefits from the inflow of foreign direct investments are dependent not only on the attributes of economic structure, but also on characteristics of political system and specific institutions in receiving state. We underline the meaning of insufficient legal protection of foreign direct investments. We prove that the analysis of cost-effectiveness of foreign investment requires taking into account the legal protection of such an investment