INSTITUTIONAL FACTORS OF ATTRACTING FOREIGN DIRECT INVESTMENTS IN THE INFRASTRUCTURE OF UKRAINE

Abstract

The article examines the system of institutional support for the inflow of foreign direct investment, because the lack of a reliable legal and institutional environment causes the slowdown of the modernization of the infrastructure of Ukraine's economy. The production potential of the industry depends directly on the equipment and the latest technologies, the ability to use innovative methods productively. Effective development is not possible without investment funds, which determine not only financial support but also innovative modernization. The use of a range of factors to attract foreign direct investment is a priority policy for the development of a cost-effective economy focused on the European type of development. It is established, firstly, that institutional factors significantly affect the volume of foreign direct investment in countries with economies in transition; secondly, it has been found that the maturity of state institutions depends on numerous macroeconomic indicators of countries' development, including foreign direct investment, which may be accompanied by high transaction costs in a non-transparent institutional environment; thirdly, it is emphasized that one of the methods of creating a favorable institutional environment is a comprehensive analysis of relevant international indicators; then, the system of indices for assessing the institutional environment of the national economy is applied; afterwards, it was confirmed that the development of various state institutions will increase the inflow of foreign investment, which will promote innovation, effective technology transfer, and this, in turn, will ensure economic growth and modernization of Ukraine’s infrastructure. Carrying out the analysis and applying the proposed tools to study the impact and opportunities to increase the volume of foreign direct investment will lead to the modernization of the infrastructural sphere of life in Ukraine and opens a new field for a broader study of this topic. The development of economic life and investment requires extensive analysis and identification of tools to regulate an important area in the modern world. Keywords: infrastructure, foreign direct investment, institutional environment, performance indices of state institutions, bilateral investment agreements