Jarosław Charchuła

Type of the article: Research Article

Abstract
The article examines the interdependence between a country’s investment attractiveness and its level of debt security, as debt risks significantly shape foreign investors’ decisions and determine the stability of capital flows. The study aims to quantify the impact of debt sustainability on investment activity using the proposed approach, which allows for analyzing this dependence under both normal macroeconomic conditions and crisis environments, including war-related shocks. The empirical assessment is conducted on a sample of six countries – Poland, the Czech Republic, Slovakia, Hungary, Türkiye, and Ukraine – which share structural characteristics such as economic openness and reliance on external financing, yet differ substantially in their debt trajectories. For each country, an analytical model of investment attractiveness is constructed based on the integrated debt security index and key macroeconomic indicators. The results reveal pronounced cross-country differences. In Poland, the Czech Republic, and Slovakia, debt sustainability demonstrates a stable positive effect on investment activity, consistent with their moderate debt burdens and macroeconomic stability. Hungary and Türkiye show a weaker and more volatile relationship, reflecting higher sensitivity to debt risks and unstable macro-financial conditions. In Ukraine, the crisis (war-related) shock leads to a significant decline in investment attractiveness, offsetting the positive influence of improvements in individual debt or macroeconomic indicators. The obtained models can be applied for comparative analysis, evaluation of debt policy outcomes, and scenario-based forecasts of investment recovery under different economic and crisis conditions.

Acknowledgment
This study is funded by the Ministry of Education and Science of Ukraine and contains the results of projects No. 0121U112685 “Economic foundations of debt security management in Ukraine under war conditions”.