Effect evaluation of macroeconomic factors influence on attracting of European investments in Ukraine

Svitlana Tkalenko
PhD in Economics, Associate Professor of European Economy and Business Department, Kyiv National Economic University named after Vadym Hetman, Ukraine, e-mail: sv.tkalenko@gmail.com, ORCID ID: https://orcid.org/0000-0003-0385-846X

Cite this article:

Tkalenko, S. (2019). Effect evaluation of macroeconomic factors influence on attracting of European investments in Ukraine. Ed.: M. Zvieriakov (ed.-in-ch.) and others [Otsinka efektu vplyvu makroekonomichnykh faktoriv na zaluchennia yevropeiskykh investytsii v Ukrainu; za red.: М. I. Zvieriakova (gol. red.) ta in.], Socio-economic research bulletin; Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 1 (69), pp. 219–226.

Abstract

The article considers the principles of foreign direct investments attraction, the particularities of this process for host countries are determined. The effect is analyzed on the basis of qualitative and quantitative indicators of European investments attracting for economy of Ukraine. The main factors that influence on the foreign investments are identified, and also developed an econometric model of these independent variables influence, such as consumption level, inflation rate, external debt, on the European investments growth, taking into account the current state of domestic economy and European integration development vector. The structural and institutional factors in the national economy that significantly affect on an attracted foreign investment volume are disclosed and analyzed. The reasons for the slow domestic economic growth, such as the political factor, poor development of certain sectors of economy (engineering, mining and others), are summarized, and also delays with the major reforms implementation for further enhance of investors’ confidence. At the same time, it was noted that Ukraine has serious needs in investments and financing of its own needs and this requires of significant international financial resources mobilization for maintaining of macroeconomic stability. It is proved that in the case when economic prospects improving, there is an increase in investment flows in the world market, because demand growth is expected in the future. It is substantiated that investments are cyclical: in conditions of economic recession, investments come and, conversely, with economic growth investments grow. It is proposed to create and implement conditions for macroeconomic stability improving in the state, to facilitate further reforms, to reduce a corruption level, to create a favorable investment and business environment, a stable legal and institutional environment, and competitiveness level increasing.

Keywords

foreign investments; synergistic effect; consumption level; inflation rate; external debt.

JEL classification: E220; E270; F210; F620; DOI: https://doi.org/10.33987/vsed.1(69).2019.219-226

UD classification: 339.9

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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