Transformations  in
Business & Economics

Investment Environment of Lithuanian Resorts: Researching National and Local Factors in the Palanga Case
Bronislovas Martinkus, Kazys Lukaševičius

ABSTRACT. The experience of economic and social development in many countries has clearly shown that the success of business development depends on investment flows and the effectiveness of their utilisation. This is the reason why there is an intensive international struggle for investments, when different ways and methods are employed in order to improve the investment environment and to increase its attractiveness. In order to achieve this objective, many countries form business- and investment-friendly tax policy as well as establish national and local structures in order to support business. After a more detailed analysis, one can claim that the investment environment is determined by factors on three different levels: national, local and resort level. However, it is difficult or even impossible to identify the most important factors, which effect the investors’ decisions without scientific research in a given business environment. Scientific research enables to identify hindrances, which put obstacles on business-flows and to elaborate more effective instruments for improving business environment. The analysis of the influence of particular factors on the resort’s investment environment, based on research-work accomplished in the Palanga-resort at the Baltic Sea is presented in this article.

The most important factors on the local level are the following ones: the quality of local (municipal) institutions; local (municipal) policy and legal regulation; social environment; local competition; local market; public infrastructure services and physical infrastructure; geographical location and transport system.

On the basis of the results of this research work, the recommendations for the improvement of the investment environment and the acceleration of the growth of investment flows have been given. The main suggestions have to do with higher publicity of the activities of local (municipal) authorities, lesser bureaucracy, and better support for the business and the solution of seasonality-related problems.

KEYWORDS: development economics, investment policy, business environment, sea-resort Palanga, Lithuania.

JEL classification: O16, O23, M21, P2.