| Summary: | In this framework, we model economic
factors affecting foreign direct investments together with social and political
factors. The model includes economic freedom index, openness rate, real
effective exchange rate, labor force population, gross domestic product, the
commodity price, which reflects global commodity costs, internet users in
population that pictures infrastructure level of economy, Gross Domestic
Product deflator for inflation rate besides democracy index to measure the
influence of social and political indicators. The purpose of working with these
models is to determine the influence of economic, social and political
indicators on foreign direct investment of selected countries. Stochastic
frontier analysis was used in the implementation to achieve the objectives of
the study. Proposals for policy implication have been made in the framework of
foreign direct investments in order to enable the countries to take advantage
of their potential investments and to increase this potential.
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