The relationships between domestic investment, country risk, governance and economic development: A comparison, Kazakhstan versus Poland

Domestic investment is one of the key drivers for economic growth and development. But domestic investment does not happen automatically. It requires a positive governance and economic environment. The primary aim of this paper was to test the impact and relationship between domestic investment and some of the determinants of domestic investment, including country risk, governance indicators, and economic development. Kazakhstan and Poland were selected as the study regions in this comparative analysis. A quantitative econometric modelling methodology was utilised to determine the relationships between the selected variables by estimating an ARDL model. In the analysis, long-run relationships and short-run causality relationships were estimated. The study and literature review results confirm that domestic investment is crucial in achieving accelerated economic growth and development. In policy development, all effects should be made to ensure an enabling environment to attract investment. Domestic investment leads to increased production and more competitive productivity. Good governance, including quality institutions and policy, is also required for increased investment.