CONTEMPORARY CHALLENGES OF INVESTMENT POLICY IN GEORGIAN MUNICIPALITIES

Nikoloz Chikhladze

Journal number 4 ∘ Nikoloz Chikhladze ∘
CONTEMPORARY CHALLENGES OF INVESTMENT POLICY IN GEORGIAN MUNICIPALITIES

10.36172/EKONOMISTI.2024.XX.04.CHIKHLADZE

Annotation

Global developments in recent years have shown us that the biggest determinant of sustainable development is the development of the real sector. This is impossible without activation of investment processes.

Foreign experience and domestic practice of creating a favorable investment climate show that a significant part of the issues should be resolved at the municipal level. The efforts of local governments can make a positive contribution to investors' decisions about where to invest.

International experience shows that the active participation of the population in the investment process contributes to the development of the city's economy. Therefore, it is necessary to form and use those effective tools. They will contribute to increasing their involvement in the development of the economy of the municipality by attracting the savings of the population.

The paper presents a regression analysis conducted by us according to the added value produced in the municipalities and investments in fixed capital (64 municipalities in total). The first stage of the analysis was conducted with three options: taking Tbilisi into account, without Tbilisi, and without Batumi and Tbilisi. The regression analysis confirmed a high correlation between the added value and investments created in the municipalities of Georgia.

The conducted analysis showed us the following: increasing the investments by each unit in a given year will increase the added value produced in the municipality by 4 times. This once again indicates the importance of investments for municipalities.

Keywords: Investment; Municipality; Correlation; Added Value.

EKONOMISTI The international scientific and analytical, reviewed, printing and electronic journal of Paata Gugushvili Institute of Economics of Ivane Javakhishvili Tbilisi State University

DOI: 10.36172/EKONOMISTI E ISSN 2346-8432 Print ISSN 1987-6890	Journal number 4 ∘ Nikoloz Chikhladze ∘ CONTEMPORARY CHALLENGES OF INVESTMENT POLICY IN GEORGIAN MUNICIPALITIES 10.36172/EKONOMISTI.2024.XX.04.CHIKHLADZE *Annotation* Global developments in recent years have shown us that the biggest determinant of sustainable development is the development of the real sector. This is impossible without activation of investment processes. Foreign experience and domestic practice of creating a favorable investment climate show that a significant part of the issues should be resolved at the municipal level. The efforts of local governments can make a positive contribution to investors' decisions about where to invest. International experience shows that the active participation of the population in the investment process contributes to the development of the city's economy. Therefore, it is necessary to form and use those effective tools. They will contribute to increasing their involvement in the development of the economy of the municipality by attracting the savings of the population. The paper presents a regression analysis conducted by us according to the added value produced in the municipalities and investments in fixed capital (64 municipalities in total). The first stage of the analysis was conducted with three options: taking Tbilisi into account, without Tbilisi, and without Batumi and Tbilisi. The regression analysis confirmed a high correlation between the added value and investments created in the municipalities of Georgia. The conducted analysis showed us the following: increasing the investments by each unit in a given year will increase the added value produced in the municipality by 4 times. This once again indicates the importance of investments for municipalities. Keywords: Investment; Municipality; Correlation; Added Value.