o:38319 Foreign Direct Investment in Latvia and Serbia: A Comparative Analysis en AbstractThemain purpose ofthis study is tocompare foreign direct investment (FDI) patterns inLatvia andSerbia, ex-amining underlying trends, institutional frameworks, andhistorical contexts that shape investment dynamics. By analyzing regulatory structures, incentive schemes, andinvestment structure anddynamics, wesynthesize best practices andpolicy recommendations forfostering sustainable investment inflows inboth countries.Thestudy employs acomparative case study approach toanalyze institutional frameworks related toFDI, as well as theperformance offoreign affiliates andthedynamics ofFDI inflows inLatvia andSerbia, fo-cusing ontheperiod from 2010to2023. Utilizing descriptive statistical methods anddata from central banks, national statistical offices, andinternational organizations, theresearch examines trends, struc-tures, andorigins ofFDI, connecting them tohistorical contexts andinstitutional andeconomic factors. Despite their disparate historical contexts, both countries share acommon thread intheir transition to-ward market-oriented economies, marked by proactive policies aimed atattracting foreign investment. Our study shows how divergent approaches inintegration andregulatory harmonization impact patterns, structures, anddynamics offoreign direct investment.Our research proposes tailoring FDI frameworks andincentive policies toleverage thestrengths andad-dress weaknesses inLatvia andSerbia. ForLatvia, expanding economic diplomacy andsupporting existing foreign affiliates could enhance investment retention andattraction, particularly from non-European Union (EU) countries. ForSerbia, policies should prioritize FDI intechnology-intensive andhigh-value-added sec-tors, supported by digitalization, workforce development, andregulatory alignment with theEU.Thestudy provides aunique quantitative andqualitative comparison offactors that affect theFDI inflows, dynamics, andstructure ofthose inflows inLatvia andSerbia, contributing tounderstanding theoptions ofpolicymakers intransition economies forattracting investments andensuring that they have positive effects oneconomic development. Keywords: foreign direct investment, investment promotion, institutional quality, Serbia, Latvia 1552099 10.18778/1508-2008.28.11 1552101 1508-2008 2026-03-17T14:00:41.874Z 44 no 46 Radovan Kastratović Univerzitet u Beogradu Ekonomski fakultet 0000-0002-6138-906X Anatolijs Krivins person application/pdf 507706 https://phaidrabg.bg.ac.rs/o:38319 no yes 18 70 92000001 11A03 Comparative Economic Research. Central and Eastern Europe 28 2 29 43 2025