An Institutional and Economic Mechanism for Enhancing the Investment Attractiveness of EU Countries in the Context of Digital Transformation

Abstract

The relevance of the study stems from the fact that digital transformation intensifies competition among EU countries for investment capital, while its outcomes remain heterogeneous: advanced digital infrastructure, electronic services and high-technology specialisation do not always lead to a corresponding increase in investment attractiveness. The aim of the article is to develop an institutional and economic mechanism for enhancing the investment attractiveness of EU countries in the context of digital transformation, based on a comprehensive typology of countries according to the way in which the digital potential of the business environment is converted into investment outcomes. The study employs integral assessment, cluster, factor and regression analysis, together with systemic, institutional and structural-logical approaches. Data processing was carried out using Microsoft Excel, while multivariate statistical analysis was performed in Statistica. The analysis covers 27 EU countries over the period 2015–2024 and is based on integrated indices of investment attractiveness and business environment digitalisation. The results identify two clusters of countries, establish a transitional zone between them and determine six factors accounting for 82.96% of the total variation in the indicators. A comparison of cluster positions, factor profiles and regression results made it possible to distinguish synergistic, compensatory, imbalanced and inverse models of digital-investment interaction. It was found that similar levels of digitalisation may be associated with different investment outcomes, as these depend on institutional quality, financial capacity, macroeconomic resilience and the structural characteristics of national economies. The scientific novelty lies in improving the organisational and economic foundations for enhancing the investment attractiveness of the EU through the development of a two-tier institutional and economic mechanism combining a common EU-wide core with an adaptive model-oriented tier differentiated according to the four interaction models. The proposed mechanism can be used to determine the composition, priorities and directions for adjusting digital, investment, financial, industrial and innovation policy instruments, considering the factor profiles and structural constraints of individual groups of countries.