Using the analysis of aggregate cross-sectional and time series data for seven transition countries, the doctoral dissertation reviewed and examines the results of empirical studies to date on the impact of foreign direct investment on labor productivity and economic growth in transition countries, from the perspective of longer data cross-sections. Through scientific and research analysis, an effort was made to answer the importance of the impact of foreign direct investment in labour productivity and economic growth, to advancements and improve technological aspects of development, export and employment. Also, a more detailed statistical analysis of the effectiveness of Southeast European countries (Albania, Montenegro, Republic of Kosovo, Bosnia and Herzegovina, Croatia, Republic of Serbia, Republic of Northern Macedonia) was made, using the following variables: attracting foreign direct investment; the level and structure of investments by industry and by aspects of the impact of development and public policy guidance on optimizing the effects of FDI. Foreign direct investment ratio and labor productivity, real GDP change, cost of labor, average net wage, exports, business environment and corruption index were analyzed based on data from UNCTAD, EUROSTAD, WIIW, CPI, National Bank and Bureau of Statistics of the respective country. for the period 2007 - 2018. Using the empirical research and the results obtained, the main hypothesis was tested and accepted that FDI has a significant positive impact on the labour productivity and the ability to achieve the economic growth of transition countries in Southeast Europe. Auxiliary hypotheses were also accepted, where a statistically significant positive association between FDI with commodity exports and employment was found. In all the countries surveyed, the level of corruption is extremely high and represents a major obstacle to attracting foreign investors, with no clear link between empirical research and established statistics on the level of foreign direct investment and the degree of business regulation. This does not mean that these reforms are not important and feasible, but they are not in themselves sufficient to attract foreign investment, because further efforts are needed to respond to the following challenges such as - more effectively combating corruption, inefficiency of the justice system, lack of political stability and complexity or inefficiency administrative arrangement.