KEY DETERMINANTS OF INVESTMENT FLOW AND FISCAL HEALTH FOR DATA-DRIVEN POLICY DECISIONS AND INFORMATION RETRIEVAL

Investment flow and fscal health represent critical indicators of a region’s fnancial and economic stability,shaped by multiple macroeconomic factors. In recent years, data-driven policy decisions have become a cornerstoneof economic governance, leveraging structural equation modeling (SEM) to enhance policy effectiveness and optimizeinformation retrieval.This study examines the key determinants of investment flow and fscal health using empirical data from multiple regionsto inform policy formulation. We employ SEM as an analytical framework to explore relationships among economicindicators, providing a comprehensive understanding of their interactions. Our analysis delves into the dynamics betweentrade freedom, foreign direct investment (FDI) flows, tax burden, and other exogenous factors affecting fscal health.Mechanism test results reveal that investment freedom positively impacts fscal health by facilitating capital movement.Additionally, an extended analysis of tax burden indicates that higher tax burdens negatively influence investment freedom,with broader implications for sustainable economic growth. The fndings highlight that judicial effectiveness and fscalhealth play pivotal roles in shaping investment dynamics, thereby contributing to more refned fscal policy strategies.Moreover, the analysis identifes inefciencies in current fscal health metrics, which fail to fully capture investmentincentives. By applying SEM to this analytical framework, researchers can derive actionable insights for policy adjustments.The results of this study not only enhance the understanding of investment and fscal dynamics but also provide empiricalevidence to support data-informed policy recommendations.