Foreign Direct Investments Between Europe and BRICS Countries: an Analysis of Investment Policies

Abstract

This article explores the dynamics of Foreign Direct Investments (FDI) between Europe and BRICS countries, focusing on the economic, political, and regulatory factors shaping investment flows. The research highlights key trends in FDI, including the expansion of BRICS with new members such as the UAE, Iran, Ethiopia, and Egypt, and the impact this has on global investment patterns. Through a detailed analysis of policies, the study compares how BRICS and European countries approach FDI regulation, emphasizing the importance of bilateral agreements and the geopolitical implications of such investments. For instance, European nations have developed stringent screening mechanisms to protect national security, particularly from investments in critical sectors like technology and energy, while BRICS countries often adopt flexible but strategically protective policies to attract investments. Challenges like political instability, state capture, and the creation of monopolies are addressed, showcasing the risks to national sovereignty and local markets. Simultaneously, the paper identifies opportunities in areas like technology transfer, infrastructure development, and market expansion, demonstrating the potential for mutually beneficial partnerships. Through case studies and data from 2018-2022, the study provides actionable insights for policymakers and investors, emphasizing the need for adaptive strategies to mitigate risks and optimize investment. DOI: https://doi.org/10.53486/cike2024.03; UDC: 339.727.22:339.92; JEL Classification: F21, F23, L40, O24