Abstract
Abstract. The main objective of this paper is to investigate the characteristics of the institutional structure of the Ukrainian financial market and to analyze the impact of foreign direct investment on it. The following methods of research were used by the authors: economic-statistical, tabular, and comparative (in empirical analysis; to make comparisons across different types of financial institutions, to investigate and evaluate the volumes of foreign direct investment by countries and their relation to the size of the domestic financial sector); systematic and logical (determining and analyzing the scope of the positive and negative effects of foreign investment on the financial market of Ukraine).The conclusions are as the follows: the structure of the financial market of Ukraine is rather nonbalanced and fragile; most foreign investors have changed their strategies on the Ukrainian financial market from aggressive to share-keeping; more attention should be paid to the development of the constructive policy concerning FDI to ensure the stability and even the development of the domestic financial market as well as to raise its investment attractiveness.Key words: financial market, commercial bank, non-bank financial institutions (NBFIs), foreign investment, investment attractiveness
Highlights
Participation of Ukraine in the international economic cooperation and international regional integration determines the current direction of the development of the national economy, activates investment processes and an appropriate financial support in the country
The lack of clearly proven in practice positive impact of foreign investment on the economic growth of a country is the reflection of the fact that, along with the benefits of foreign investment, there are the disadvantages that diminish the positive impact to some extent
Such a structure of assets is not considered quite rational in the world in terms of the performance effectiveness of the financial market, since life insurance companies and pension funds should be able to accumulate the crucial volumes of long-term financial resources to invest in the domestic economy
Summary
Participation of Ukraine in the international economic cooperation and international regional integration determines the current direction of the development of the national economy, activates investment processes and an appropriate financial support in the country. Among all other sources of foreign funding, foreign direct investment (FDI) influences most significantly the economic growth through the accumulation of internal savings, the lower cost of capital, transfer of innovative technologies and development of domestic financial institutions (Prasad, 2003). According to the research of Lipsey (2002), FDI has mainly a negative impact and only a few positive effects on economic development, especially in the financial market. The most significant contribution to the study of the impact of FDI on the economic and financial market safety of Ukraine in the context of financial globalization and integration has been made by the Ukrainian academician Geyets (2010) who chairs the Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine. Given the current interest to the topic and controversial opinions on the impact of FDI in financial and scientific circles, the objectives of the article are the following: investigation of the dynamics of the Ukrainian financial market development, analysis of the impact of FDI on the financial sector of Ukraine, disclosure of the main advantages and disadvantages of investing, as well as identifying the obstacles that prevent FDI inflows to the economy of Ukraine during the post- crisis period
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