FOREIGN INVESTMENT AS A FACTOR OF ECONOMIC REVIVAL OF THE STATE

Investment is one of the main sources of sustainable economic growth of any country. A special need for investment, including foreign ones, is experienced by countries with economies in transition, to which Ukraine belongs. This article aims to analyze the state and dynamics of foreign direct investment and determine the sectoral structure of foreign direct investment in the national economy in the sectoral dimension to identify the problems and opportunities for investment development of Ukraine. According to the results of the analysis, it was found that the volume of foreign direct investment in Ukraine remains at a low level, and cannot affect the solution of problems related to the raw materials orientation and sectoral inefficiency of the national economy. Trends in attracting foreign direct investment to Ukraine are analyzed and the main factors slowing down this process are identified. These factors include the ongoing military conflict in the East of Ukraine, macroeconomic problems, political instability and low quality of institutions. It was found that, starting in 2018, there has been a gradual renewal of the interest of foreign investors in Ukraine. At the same time, it was found that foreign investments are directed mainly to less technologically and science-intensive industries and sectors of the economy. They account for about 60% of the total volume of foreign direct investment in the Ukrainian economy. It was emphasized that the priorities for national and foreign investment in Ukraine should be medium- and high-tech industries, which currently account for only a few percent in the total structure of foreign direct investment. To remedy the current situation, it is proposed to introduce tax and non-tax methods of investment incentives, among which industrial parks should take a special place as one of the most effective tools for attracting foreign investment in world practice. They contribute not only to the inflow of foreign investment, but provide many other advantages to countries and regions, including: the creation of new jobs, an increase in industrial production, the growth and diversification of exports, the attraction of foreign technologies and management practices, the development of high-tech industries. All these advantages and benefits from the creation of industrial parks are in need of Ukraine.

The article considers the role of foreign investment in the Ukrainian economy, identifies factors that have a positive impact on the investment climate and outlines the problems of creating a favorable investment environment. The urgency of the topic is to emphasize the problem that arises in everyday life connected with foreign investment, ensuring the high rates of development of economic entities and increasing the competitiveness to a large extent determined by the level of their investment activity and the range of investment activity. Investments play a central role in the country's economic development, they determine the overall growth of its economy. The effectiveness of investment policy depends on the state of production, the level of technical equipment of fixed assets of enterprises, the possibility of structural adjustment of the economy, the solution of social and environmental problems. Investments form the basis of the development of enterprises, individual industries and the economy as a whole. In modern conditions, they are the most important means of ensuring structural changes in the national economy, the growth of technological progress, and the improvement of the quality indicators of economic activity at micro and macro levels. Activation of the investment process is one of the more reliable mechanisms of socio-economic transformation. Now in Ukraine there is a problem of a lack of financial resources. Today, the state is unable to invest in various spheres of the economy due to lack of budget funds. Therefore, among the problems that require an immediate solution, one of the first places is the lack of investment resources in the Ukrainian economy and the creation of favorable conditions for their accumulation. It is worth noting that the processes of economic growth are conditioned by the volume and growth of investments, their structure and qualitative characteristics. Investments, including foreign ones, are not only a mechanism for development, but also a way regulation of the economy through the transfer of capital. At the current stage of development of the market, foreign investments are the main source of obtaining the latest competitive technologies. The purchase of Ukrainian enterprises or their shares, that is, the implementation of merger (acquisition) processes, is considered by foreign investors as an attractive way of investing from those positions that decreases risk due to ineffective management. At the same time, the chances of using best practices in obtaining new technologies and handling in the period of a prolonged crisis are increasing.

The purpose of the paper is to critically analyse and understand how foreign investment can affect and potentially improve Ukraine's competitiveness in the global market after the war. Methodology. This study aims to analyse the various aspects and dimensions of foreign investment, in particular direct investment flows, and their impact on key sectors of the economy in Ukraine in the post-war period. In addition, it attempts to assess the challenges and opportunities that foreign investment creates in the context of rebuilding and modernising Ukraine's infrastructure, enhancing its technological and innovation potential, and strengthening its labour force and industrial base. The survey results showed that foreign investment has had a significant positive impact on Ukraine's economic growth in the post-war period, especially in the restoration of key industries and infrastructure. FDI plays an important role in attracting advanced technologies and expertise to Ukraine, thereby increasing its competitiveness. The document emphasises the need for policy reforms to create a more favourable investment climate, including improved legal protection for investors, anti-corruption measures and increased efficiency of the bureaucracy. The results of the study point to the existing challenges in attracting foreign investment, such as political instability, infrastructure deficit and unclear investment legislation. Finally, the publication forecasts the long-term impact of foreign investment on economic stability and growth trajectory in Ukraine, which leads to cautiously optimistic conclusions. Practical implications. The research aims to provide insights and recommendations on how Ukraine can effectively use foreign investment to rebuild its economy, increase its global competitiveness and ensure long-term sustainable development in the post-war period. The SWOT analysis in this article helps to identify strategic areas for improvement and capitalisation. It can help them formulate policies to improve the investment climate by focusing on strengthening strengths, mitigating weaknesses, seizing opportunities and protecting against threats. Value/Originality. The value and originality of the paper lies in its comprehensive and detailed study of how foreign investment can be a key factor in reforming and reviving Ukraine's economy after the war. The paper specifically examines the post-war economic landscape of Ukraine, a topic that has not been widely studied. It provides a fresh perspective on the challenges and opportunities for a country recovering from war.

Methods. The theoretical and methodological basis of the research is the work of domestic scientists, data from government agencies, in particular the Ministry of Finance of Ukraine, the State Statistics Service of Ukraine, the National Bank of Ukraine. Information from the International Monetary Fund, the EU website, and the European Business Association was also used. The results were obtained using a range of methods: the method of logical analysis made it possible to develop the logic of the research; structural and statistical analysis of dynamics was used to evaluate private foreign investments in Ukraine by EU countries and types of economic activity; graphic method – for visualization of the obtained research results; grouping methods, tabular – for selection, generalization of data and presentation of calculation results; deduction – to highlight certain factors affecting the investment attractiveness of Ukraine and others. Results. The article is devoted to the analysis of trends in foreign direct investment inflows to Ukraine, in particular from EU member states. The essence of direct foreign investments is considered. The volume of FDI in the economy of Ukraine, FDI inflows (operations and balances under instruments) by EU investor countries were studied. It was revealed what events influenced the excess of FDI outflows over inflows in the national economy. The dynamics of the volume of FDI (share capital) in the domestic economy, in particular from EU countries, FDI (residues on instruments) in Ukraine by types of economic activity were also considered and analyzed. The investment attractiveness is characterized and the main negative factors influencing the investment climate of Ukraine are identified. Novelty. An assessment of the current state of direct foreign investment in the economy of Ukraine by EU countries is provided. The general trends of FDI attraction in the economy of Ukraine are substantiated. Prospects for the further development of Ukraine's investment relations with EU countries have been determined. Practical value. The analysis of the dynamics of the volume of private foreign investments in Ukraine makes it possible to predict the trends of future inflows, in particular from the EU countries. It is also possible to identify EU member states that invest the most and the least in our country and, as a result, develop measures to increase Ukraine's attractiveness for FDI from EU countries, since they are economically and innovatively developed.

Foreign direct investment may be an important source of economic development for nations. Acceleration of mobility of capital with globalization has increased foreign direct investment flows around the world. Although being one of the largest economies in the world, Russia has not been getting expected amount of foreign direct investment. Furthermore, foreign direct investment to Russia has been concentrating in a limited number of regions, amplifying regional inequalities. Inadequate foreign direct investment performance of Russia is a result of structural imbalances and legal background. In this study, importance and development of foreign direct investment in the Russian economy are investigated. In this context, benefits and negative impacts of foreign direct investment to the Russian economy and its negative impacts on it were discussed. Factors which make the country attractive to the foreign direct investment and impede foreign investment were examined as well as the sources of and solutions to the problem of uneven regional distribution of foreign direct investment. In order for Russia to attract more foreign direct investment, a favorable investment climate must be formed with modifications at the state policy level. Strategic participatory regional planning approach must be adopted to increase FDI flows to the Russian regions.

Attracting foreign investment is a viable means of ensuring the economic growth of any country. The relevance of the study is substantiated by the creation of a favorable investment climate in the country, which will allow the establishment of guarantees of protection of foreign investments and stability of the legal basis for entrepreneurship performance. The article aims to analyze and forecast the inflow of foreign direct investment (FDI) into Ukraine. In order to achieve the stated purpose, the econometric model was developed, which demonstrates the correlation between macroeconomic indicators, their characteristics and the amount of FDI. A set of general scientific and special research methods were used, in particular: induction and deduction, grouping, summarization, comparison, complex and systemic approaches. The article reveals the essence of foreign investment for the Ukrainian economy and defines the characteristics of FDI. The impact of FDI on the economy of Ukraine is analyzed in detail and the conditions for their attraction are substantiated. Using statistical methods, the structure and dynamics of FDI by types of economic activity and investor countries are investigated. The conducted research has shown that through the attraction of foreign direct investment economic growth, the well-being of the population, the reduction of foreign indebtedness and efficient state capital investments are ensured. Taking all this into account the necessary preconditions for the attraction of foreign direct investments into the Ukrainian economy were substantiated.

Not only does Russia have a poor record of attracting foreign direct investment (FDI) since the advent of reform in the early 1990s, but well over half of the investment it does attract goes to four regions in the western part of the country. Overcoming this skewed distribution of FDI - undoubtedly a factor in the country's uneven regional economic development - is essential for furthering Russia's growth and transition to a market economy. Factors associated with market size, infrastructure development, and the policy environment seem to explain much of the observed variation in FDI flows to regions in Russia. Since its transition to a market economy began, Russia has not attracted much foreign direct investment (FDI). Inflows of FDI into Russia are much lower than those into other transition countries in the region, adjusted for population size and similar measures. Clearly, if Russia is to grow it must increase the level of FDI inflows, which is why a good deal of policy attention has focused on the problem. Equally important for achieving sustainable growth in such a large, heterogeneous economy is learning how to make the spatial distribution of FDI within Russia more even. Inflows are strikingly skewed. Close to 60 percent of FDI goes to four regions in the western part of the country - Moscow City, Moscow oblast, St. Petersburg, and Leningrad oblast - which account for only 22 percent of Russia's gross national product and only 13 percent of Russia's population. Only two of the other 85 regions account for more than 2.5 percent of the country's FDI and most account for much less. Surprisingly, neither policymakers nor observers and analysts have paid much attention to diagnosing the reason for this imbalance in FDI's distribution. Broadman and Recanatini try to empirically unbundle the determinants of FDI's regional distribution within Russia. They find that factors associated with market size, infrastructure development, and the policy environment seem to explain much of the observed variation in FDI flows to regions in Russia. Moreover, the explanatory power of the model that best explains cross-regional variation in FDI flows from 1995 to 1998 changes significantly after the 1998 default and ruble devaluation - suggesting the possibility of a change in the determinants of FDI after the 1998 crisis. This paper - a product of the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region - is part of a larger effort in the region to study structural reforms in the Russian Federation. The authors may be contacted at hbroadman@worldbank.org or frecanatini@worldbank.org.

1997년의 금융위기 이후, 일본 기업의 소유구조는 내부자 지배에서 외부자 지배 구조로 변화했다. 이 글은 외국인 기관투자가의 역할에 초점을 맞추면서 기업소유구조의 극적인 변화가 기업지배구조와 기업가치에 끼친 영향에 대해 분석한다. 증가한 외국인 소유의 역할을 두고 서로 대립하는 두 가지 견해가 존재한다. 긍정적인 견해는 외국인 투자가가 감시 능력이 매우 높고 기업지배구조를 개선하며, 그 결과 기업의 실적을 향상시킨다는 것이다. 반대로 부정적인 견해는 외국인 투자가의 투자 전략이 매우 편향되어 있고 특정 기업에 대한 헌신도가 낮다는 것이다. 비록 외국인 소유와 높은 기업 실적 간에 상관관계가 관측되기는 하나, 이것은 피상적인 것일 수 있다. 높은 주식 수익률은 주식 수요에 의해 유인될 수 있는 것이고 기업 실적은 단순히 양질의 기업에 대한 외국인 투자가의 선호를 반영하는 것일 수 있다. 두 견해 중 어느 쪽이 더 설득력 있는지 결정하기 위해 우리는 독특한 장기적 데이터 세트를 구축했다. 그리고 외국인 소유의 결정 요소를 검토하고 외국인 소유가 주식 수익과 기업 실적에 미치는 영향을 조사했다. 먼저 외국인 투자가의 투자 행위는 어떤 특정한 편향(bias)이 특징이고, 기업지배구조의 성격을 고려해서 이루어진다는 점을 발견했다. 두 번째 발견 사항은 외국인 투자가 기업의 주식 수익에 상당한 영향을 미쳤다는 점이다. 세 번째는 역의 인과관계(reverse causality)를 통제한 후에도 증가하는 외국인 투자는 기업 실적에 양의 효과를 미쳤다는 점이다. 이는 일단 외국인 기관 투자가들의 주식 보유량이 증가하고 나면 이들이 기업에 대해 규율자 역할을 했음을 보여준다.

The article examines the dynamics of accumulated foreign direct investment in the economy of Ukraine in 2010–2021 and analyzes the reasons for the significant decrease in FDI inflows to the economy of Ukraine, the withdrawal of significant amounts of capital by foreign investors in periods of deepening economic crisis. The structural changes of foreign direct investment in the Ukrainian economy by types of economic activity and by industry for the period 2015–2021 are analyzed. With the help of regression analysis, modeling of the dependence of economic growth of Ukraine on changes in the volume of foreign direct investments was carried out under the condition that the war ends in 2023. To build a linear regression model, data on the GDP of Ukraine, GDP per capita, the volume of accumulated FDI in the economy and their annual revenues, the volume of FDI in the main sectors of the economy in 2010–2021 and the forecast values of these indicators in 2023–2025. The results of the study confirmed the importance of increasing both the total volume of FDI and the volume of investment involved in high-tech industries industry, to restore the economy of Ukraine after the end of the war. Regression analysis made it possible to reveal a direct connection between the economic growth of Ukraine and the volume of accumulated FDI in the economy and their annual inflow. Based on the model of linear dependence of Ukraine's economic growth on foreign direct investments, forecast scenarios of changes in Ukraine's GDP in actual prices and GDP per capita in 2023 were developed, provided that the volume of accumulated FDI in the economy increases. As a result of the study, no statistically significant dependence of the economic growth of Ukraine on the volume of accumulated FDI in the metallurgical industry and in the in the field of information and telecommunications sector was found. The regression analysis confirmed the significant direct dependence of Ukraine's economic growth on the volume of FDI involved in the machine-building industry, which proves their important role in the implementation of post-war economic recovery projects of Ukraine.

The article is devoted to an analysis of the state and prospects for attracting foreign direct investment into the Ukrainian economy under martial law. The essence of the concept of “foreign direct investment” explored and its characteristic features are determined. It established that in the legislative acts of Ukraine only the concept of “foreign investments” presented for consideration and their content described. The role of transnational companies at the present stage of attracting foreign investment to Ukraine outlined. A list of transnational companies operating in the domestic investment market provided. An analysis of the dynamics of foreign direct investment in Ukraine carried out based on the principle of direction. The unstable nature of cash flows revealed. It established that a significant part of foreign direct investment in the overall structure made up of those directed to Ukraine. However with the advent of war in 2022, the already not very high investment attractiveness of the Ukrainian economy decreased. This significantly complicated the economic situation in the country and significantly decreased its investment activity. An assessment was made of the scale of capital reinvestment in Ukraine through “round tripping” operations. Their unstable dynamics established and it revealed that the most significant volumes of foreign direct investment were directed to industries and institutions engaged in wholesale and retail trade. The main investor countries for round tripping operations presented, of which a significant part belongs to Cyprus and the Netherlands. Because of the study, factors identified that negatively affected the processes of foreign investment in Ukraine and related to the war and business rules. Recommendations developed that take into account general economic and institutional conditions for activating the foreign investment market in Ukraine. Separate effective mechanisms for their implementation presented. The need to formulate a state investment policy to further attract foreign investment into the Ukrainian economy for recovery after the war noted. This is due to the priority of restoring the domestic industrial and agricultural complex, increasing the country’s export potential by implementing strategies to overcome the economy’s dependence on imported energy resources, etc.

The article describes the essence of foreign investment and understanding of the concept of "industry". The dynamics of foreign investment inflows into the economy of Ukraine for 2010-2019 is shown and the branch structure of foreign direct investment (equity) in the economy of Ukraine by types of economic activity in 2010-2019 is analyzed. The position of industry in the overall process of attracting foreign capital is analyzed. The structure of foreign investment in the industry of the economy of Ukraine by types of economic activity in 2010-2019 is revealed. The main donor countries of direct foreign investments in the industry of the economy of Ukraine are identified. The basic ways of development of industry of Ukraine are considered. The purpose of the article is to determine the trends of development and features of foreign investment of the national economy of Ukraine. During the research, a set of general scientific methods was used: dialectic method, systemic method, method of analysis and synthesis, induction and deduction, descriptive method, comparison method and specific methods, in particular, economic-statistical methods, graphical method, etc. Practical relevance: the results of this study can be used in teaching the subjects "economic theory", "economic policy", "investing", as well as in the development of industrial development strategies in Ukraine.

The article considers foreign direct investment as an economic phenomenon. It is noted that the investment climate of the country plays a special role in attracting foreign capital. The main factors of formation of investment attractiveness of Ukraine, which contribute to the expansion of its investment ties, are named. The East Invest - 2 project and the main recommendations for improving the efficiency of attracting foreign investment into the economy of Ukraine are considered. Particular attention is paid to identifying the threats that foreign investment can pose to the host country, such as: the relocation of hazardous environmental production, control over raw materials, capital flight and others. The main tendencies of foreign investment in Ukraine are considered. Also, the study found that increasing productivity is one of the positive effects of foreign investment, as it is associated with a high level of innovation in such investments. In Ukraine, labor productivity in enterprises with foreign investment is on average 3.5 times higher than in enterprises without them. This is, in particular, due to a larger amount of investment in fixed capital per employee, which in firms with foreign capital is more - 5 - 7 times. In modern economic conditions, the investment environment has a significant impact on attracting foreign investment, which in Ukraine remains not the most favorable. The main factors of the need to further increase foreign investment in the economy of Ukraine are indicated. The main problems that hinder the processes of attracting foreign investment to Ukraine have been identified. At the same time, the main aspects of Ukraine's attractiveness as an investment recipient have been identified. Outlining the main directions of formation of a favorable investment climate in Ukraine. The directions of further activity of Ukraine concerning formation of effective strategy of increase of investment attractiveness are named. The ways to stimulate investment are identified and the objects of investment that can bring more profit to the investor at the present stage are identified.

The article defines the modern determinants of foreign investments’ activation in the international financial space. Foreign investments became a decisive driver for the formation of additional competitive advantages in the global capital market, ensuring the transfer of capital, knowledge, and technologies across borders. Foreign investment flows become the basis for forming a single system of relations and a new configuration of the world economy. The dynamics of foreign direct investment (FDI) by groups of countries and regions were analyzed. Over the past two decades, global FDI flows have grown rapidly, largely due to the intensification of investment activity in developing countries due to accelerating economic growth, increasing market potential, and using effective government policy tools to stimulate foreign investment. The specifics of the distribution of foreign direct investment between host countries have been determined in view of the consequences of the COVID-19 pandemic. The pandemic didn’t affect the countries’ ranking among the leaders in attracting and exporting FDI. Due to the export of FDI from Hong Kong (China) and Thailand, Asia became the only region where growth in FDI flows was recorded during the pandemic, and China became the largest investor in the world in 2020. As a result of quarantine restrictions and measures to counter the consequences of the pandemic, the lowest fall in FDI indicators over the last decade. The fact that the number of restrictive measures against foreign capital in 2022 increased sharply, mainly due to the war in Ukraine has been determined. Such procedures included sanctions against financial institutions; trade and transportation restriction measures; travel bans and asset freezes for hundreds of individuals and legal entities. The peculiarities of the recovery of FDI indicators in the post-Covid period are highlighted, and it is determined that in the near future, new risks may arise for the stable development of international investment activities in view of the war in Ukraine and a number of new shocks in the world economy.

The fact that Ukraine is involved in the worldwide process of globalization and integration intensifies the attraction of overseas capital, which is an important tool for structural changes in national economies, for replenishing the budgets of countries and ensuring their economic growth. The current economic development of Ukraine is a result of the lack of country’s own financial resources, which confirms the need to create a favourable investment environment and intensify international investment. In view of this, the essence of foreign investment has been considered; the main forms and modern approaches to the classification of foreign investment have been described. It has been highlighted that foreign direct investment is the most effective for further development of the national economy in the context of globalization. The main aspects that make Ukraine’s economy attractive for international investors have been identified. An economic and statistical approach has been used to analyze the volume of foreign direct investment in and from Ukraine and from the country in the dynamics as a whole, as well as in terms of individual countries. The orientation of foreign direct investment in certain types of economic activity has been analyzed; and the priority directions for foreign investment in the national economy have been determined. The transformational changes in the way how domestic statistical information related to foreign direct investment is displayed have been identified. It has been emphasized that currently the only body responsible for disseminating information related to international investment is the National Bank of Ukraine. The factors that affect foreign investment have been specified, as well as investment risks associated with the use of overseas capital in the country. It has been noted that the further implementation of Ukraine’s economic policy in the field of foreign investment is associated with the appropriate regulation of both attraction of investment and its effective use. Prospects for international investment in Ukraine have been highlighted.

Актуалізовано виключне значення іноземного інвестування в розвитку країн. Представлено статистичні дані щодо сумарних обсягів прямих іноземних інвестицій в економіці України протягом 2010—2017 рр. Ідентифіковано причини низького темпу приросту прямих іноземних інвестицій в українську економіку за останні роки. Узагальнено позиціонування України у світових міжнародних рейтингах. Продіагностовано географічну структуру прямих іноземних інвестицій. Акцентовано увагу на проблематиці надходження інвестицій з офшорних зон. Визначено чинники, що визначають низький рівень інвестиційної привабливості України, які диференційовано за двома блоками: перший з яких визначається характеристиками держави як системного об’єкта інвестування, другий – несприятливим інвестиційним кліматом. Акцентовано увагу на низькому стимулювальному впливі прямих іноземних інвестицій на становлення виробництв вищих п’ятого і шостого технологічних укладів. Обґрунтовано пріоритетні напрями активізації іноземного інвестування: створення сприятливого інвестиційного клімату в країні, забезпечення відповідності розподілу прямих іноземних інвестицій стратегічним завданням економічного розвитку держави. Відзначено об’єктивну необхідність реального, а не декларативного поліпшення інвестиційного клімату, зменшення бюрократичних процедур, спрощення регуляторно-реєстраційних вимог і вжиття радикальних заходів щодо дієвого захисту інвестицій, розроблення і імплементацію раціональної інвестиційної концепції, яка забезпечить підвищення інвестиційної активності за наявності певних економічних передумов.