Global Investment Flows Research Articles

The impact of energy prices on industrial investment location: Evidence from global firm level data

This study examines the influence of relative energy prices on the geographical distribution of industrial investments across 41 countries. Employing a gravity model framework to analyse firms’ investment location decisions, we estimate the model using global bilateral investment flows derived from firm-level M&A data. Our findings reveal that a 10% increase in the energy price differential between two countries results in a 3.2% rise in cross-border acquisitions. This effect is most pronounced in energy-intensive industries and transactions targeting emerging economies. Furthermore, policy simulations suggest that the impact of unilateral carbon pricing on cross-border investments is modest.

Determinants of global migration: The impact of ESG investments and foreign direct investment

In response to global economic, social, and environmental problems, ESG investment principles have changed the approach to directing and structuring foreign direct investment. Additionally, they are becoming an essential factor in attracting migrants. This article aims to determine the impact of foreign direct investment on global migration trends and their peculiarities with the introduction of ESG investment principles. For this purpose, global foreign direct investment flows, global ESG investment flows, and global migration trends have been analyzed from 1995 to 2022. Pairwise correlation calculation was used as the primary analysis method through R-Studio software with integrated R programming language. The results indicated a 35% correlation between the volume of global ESG investment flows and the number of international migrants (as a percentage of the total population, which varies between 3.2% and 3.6%) for 2010-2022. Subsequently, regression analysis was conducted to explore the relationship between critical variables: investment flows and the level of migration in four European countries (France, Poland, the Czech Republic, and Germany). It was determined that investment inflows led to new jobs, accelerated economic growth, and improved business climate, thus encouraging reduced outflow and increased inflow of migrants. Investments based on ESG principles also reduce emigration as they enhance the quality of life in the host country, provide better environmental protection, and promote more transparent corporate management. However, it should be noted that investments have no apparent impact on migration caused by external factors such as wars or political conflicts, so such analysis should not include periods of global economic and political unrest.

COVID-19 and Global Value Chains Participation: Export Performance of Croatian Firms

Abstract For the last two-three years, the disruptions of the GVC caused by the COVID-19 pandemic have forced the business sector to restructure and adjust, sometimes very costly and painful. Moreover, with the recent war in Ukraine foreseeable negative implications, it is very certain that large-scale disruptions in the global economic trade and investment flows, and ultimately in the GVC, will dictate the survival and sustainability of business in many economic sectors in the years to come. The main goal of this paper is twofold. First, to review the existing research on the effects of the COVID-19 pandemic on global trends affecting the current reconfiguring and reshaping of the GVC. Second, to analyse the characteristics of Croatian firms that recorded a decrease in their (indirect and direct) exports in the COVID-19 period by performing a logit model and utilising the World Bank’s Enterprise Survey 2019, backed up by the Enterprise Surveys Follow-Up on COVID-19 (3 rounds up to now).

RISK, RETURN AND INTERNATIONAL PORTFOLIO DIVERSIFICATION: K-MEANS CLUSTERING DATA

The work is devoted to the study of the international investment portfolio, its features such as risk, profitability and the level of international diversification, as well as global flows of portfolio investments. The methodology of the work is as follows. The paper develops k-means clustering model to study the patterns of global portfolio investment flows and equity markets. The model groups 30 developed and emerging stock markets according to three variables: return, risk and the level of international diversification. Thus, the main purpose of this paper is to investigate different stock markets on a global scale through an in-depth analysis of the respective market portfolios and their measures of risk, return and international diversification, as well as their interrelationships. The researcher develops and builds the model in such a way as to either confirm or refute the hypotheses put forward. The results of the study demonstrate the following results, which present opportunities for further research. The study supports the hypothesis that portfolios of investors from developed stock markets have a better level of international diversification than portfolios of investors from emerging stock markets. However, there is high within-group variation in the levels of international diversification among developed markets. There are three groups of developed markets based on the level of international diversification of investors in their respective markets: low-level markets (ca. 22%); mid-level markets (43%); and high-level markets (ca. 61%), while emerging markets are generally more heterogeneous. The hypothesis that stock markets that are domestic to investors with higher levels of international diversification have higher rates of return and lower rates of risk has not been confirmed. In general, developed stock markets are characterized by higher returns and international diversification with lower risk ratios. Nevertheless, the higher level of international diversification in developed market portfolios is not always accompanied by better stock performance. The best risk-return ratio (return – 0.46%, risk – 5.56%) is observed for markets from the cluster with an average level of international diversification. While the markets in the cluster with the highest level of international diversification have unreasonably high-risk ratios, which are not compensated by better returns. Markets in the cluster with lower levels of international diversification have unreasonably low rates of return that are not accompanied by correspondingly lower risks.

Global trends in foreign investment and their role in the post-war reconstruction of Ukraine’s economy

Methods. The results of the study were obtained using general and special methods and scientific approaches, namely: methods of abstraction and comparison, economic-statistical and logical-analytical analysis – to diagnose and assess global investment flows and foreign direct investment in Ukraine; methods of mathematical statistics – for factor analysis of the dependence of changes in GDP in the country on changes in PPI; method of theoretical generalization – to justify the choice of mechanisms for attracting foreign investors and intensify investment activities. Results. A thorough analysis of global investment trends, methods and mechanisms of attracting foreign direct investment to the country was conducted. The nature of trends in global investment flows and types of investment clusters created within the world economy is established. The experience is considered of stimulating foreign investors of Invest in Lithuania, an agency for promoting foreign investment in Lithuania, which is a benchmark in Europe due to its professionalism and organization. Investment flows in Ukraine are analyzed, key problems, challenges and risks of Ukraine’s investment policy to attract foreign direct investment are identified. It is established that, in contrast to global trends, foreign direct investment in Ukraine has not become a significant factor in Ukraine’s economic development, which is confirmed by the lack of correlation between changes in GDP and changes in FDI. It is proved that in the post-war economy FDI will become a driver of economic growth in the context of a new economic model, integrated into the Western and world political and economic space, yet focused on national interests. A set of instruments and mechanisms to encourage foreign investors to participate in developing the country’s economic potential in the post-war period is highlighted; they take into account the specifics of the national economy and meet the strategy of economic revival of Ukraine. Novelty. Effective mechanisms for implementing Ukraine’s state investment policy to stimulate foreign direct investment in the post-war economy are proposed, which take into account global investment trends and best practices in stimulating foreign investors. Practical value. It consists in developing proposals for using tools and mechanisms to attract foreign investors, considering the specifics of the post-war economy of Ukraine. The findings and results of the study will help to build the country’s investment potential, restore the destroyed national economy and create a strong economy.

Evaluating the economic and ecological effects of investment projects: A new model and its application to smartphone manufacturing in Europe

Despite market volatility in 2020 due to the COVID-19 pandemic and a decline in global investment flows to 2005 levels, sustainable development funds continued to grow. These data indicate a change in development vectors: now leading investors are guided by technologies for sustainable growth. The purpose of this paper is to determine the optimal model for evaluating investment projects in terms of their economic and environmental effects on the development of the region. The proposed technique is being tested for an investment project aimed at developing the production of mobile phones in Europe. As shown, the analysis of the location of the production of smartphones in Europe for subsequent implementation in the European market has a number of advantages and is more beneficial in terms of environmental and economic effects for the region. First, from an economic point of view, this leads to an increase in the volume of attracted investments, a decrease in operating costs for international logistics, the creation of new jobs and qualifications for the population. In addition, it is important to be able to actively implement circular business models that will reuse lithium-ion phone batteries, which will lead to a decrease in the need for cobalt as a raw material, as well as lead to an increase in the level of recycling of e-waste and the circularity of the European economy. Also, such investment projects open up great opportunities for manufacturers from a marketing point of view, creating bonuses for a positive image and preferences for a “local green producer”.

Undercurrents in the world economy: Evolving global investment flows in the South

AbstractForeign direct investment (FDI) to the global South has increased, but very little research has gone into analysing the diverse FDI flows between unequally related groups of countries. This paper contributes by investigating (a) the distribution of global FDI into and between semi‐peripheral and peripheral countries in the global South (2006–2014), and (b) the country location factors of FDI in these two regions. We introduce a distinction between multinational enterprises from emerging (EMNE) and from peripheral countries (PMNE) and show evidence of their different investment behaviour. Our results uniquely demonstrate intra‐regional investment differences, the increasing sophistication of peripheries as hosts and sources of FDI (developmental undercurrents) and a rich set of location factors explaining FDI into these regions. We also show that EMNEs invest in semi‐peripheral countries so as to benefit from their emerging capacity to innovate.

ТЕНДЕНЦІЇ РОЗВИТКУ ПОРТФЕЛЬНИХ ІНОЗЕМНИХ ІНВЕСТИЦІЙ В УКРАЇНІ

The paper reviews the processes of direct and portfolio investment, outlines the differences and the main directions of implementation of ways to achieve economic goals using these tools at both international and national levels. The arguments and reasons for the growing popularity of portfolio investing in the modern world are given, given the wider range of sources of primary information on the state of the stock market in global trading platforms and the ever-increasing tools for managing investors’ assets. Based on the systematization of the work of foreign and domestic scientists, the assessment of the role of investment activity in the formation and further successful development of the national economy is given. Taking into account the experience of developed countries, the need to develop the stock market of Ukraine, identify problems and, taking into account the specifics of the domestic economic and geopolitical space, proposed effective steps to improve the investment climate in our country. In order to detail and classify possible areas of investment activity, the study analyzes the types of investment instruments and identifies their likely target use in modern realities. The analysis of investment activity of Ukraine in the period 2014-2020 provided an opportunity to find out the main trends in the dynamics of changes in direct and portfolio investment. From the point of view of the root causes of the low level of investment activity in this period, gaps in the legislation, the presence of corruption schemes, inconsistencies in the strategies of regulatory financial institutions, a large share of the shadow economy, military action in industrial regions were highlighted. Therefore, despite the high level of return on capital in Ukraine, our country has found itself on the sidelines of global investment flows. The study of the ratio of direct and portfolio investments and their dynamics shows a certain pattern. First, Ukraine is characterized by a constant excess of direct investment over portfolio investment. Secondly, the gap between these types of international capital movements in our country is narrowing due to the increase in portfolio investment. This situation makes it possible to state the invariability of the negative level of investment attractiveness of the domestic economy in the real sector, and the problems of economic imbalance are covered by external borrowing through the use of one of the portfolio instruments, namely placement of foreign and domestic government bonds. The main emphasis is on the inadmissibility of such a state of affairs, which makes it possible only temporarily to maintain Ukraine’s economy in a stable state. A review of the dynamics of the country’s debt growth and the decline in the competitiveness of domestic production in the context of a very high degree of depreciation of production capacity, only confirms the need for urgent measures to stimulate the process of direct investment. Regarding the development of the portfolio investment process, it is proposed to bring the regulatory framework to international standards in the first place. Combining the stimulation of direct investment, especially in the real sector of the economy, in the presence of relevant laws and financial institutions, inevitably revival in the stock market, which in turn will change the structure of portfolio investment in Ukraine. The opinion also expresses the need to take into account the external effects of the investment process, namely to pay attention to increasing the indicators of inclusive economic development.

ДОСЛІДЖЕННЯ ІНВЕСТИЦІЙНОГО ПОТЕНЦІАЛУ УКРАЇНИ ТА НІДЕРЛАНДІВ: ПОРІВНЯЛЬНА ХАРАКТЕРИСТИКА

In the article the authors substantiated the importance of studying world experience to increase the country's investment attractiveness, revealed the essence of the country's investment potential, and pointed out the main factors that affect the level of investment potential and used in calculating the country's investment attractiveness. Authors have considered the consequences of the COVID-19 pandemic for global investment flows. The place of Ukraine and the Netherlands in global investment flows is assessed. A comparative assessment of the natural-geographical, consumer, labor potential of Ukraine and the Netherlands was conducted. In particular, it was found that Ukraine has a high level of investment potential (favorable geographical location, natural resources, large consumer market and highly educated and at the same time relatively cheap labor), but foreign investors are reluctant to invest here, and in the Netherlands the situation with natural resources, geographical, labor, consumer potential is slightly worse, however, over the past decade the country remains one of the largest recipients of foreign direct investment in Europe. It is established that the reasons for this situation are the legislative, political, social, economic risks in Ukraine and the Netherlands and their impact on the investment climate in both countries. The tax policy, the level of corruption, quality and efficiency of public administration in both countries and their impact on foreign direct investment flows are studied. The ranking positions of the studied countries according to the indicators of investment attractiveness, namely the Index of Ease of Doing Business, the Global Innovation Index, the Corruption Perceptions Index, the Economic Freedom Index, and the Prosperity Index are analyzed. Based on the results of the study, priority areas of work in the field of increasing the investment potential of our state are formulated, namely: overcoming corruption, reforming the judiciary, regulatory and law enforcement agencies, stimulating innovative research and development, infrastructure development, investment freedom, protection of private property.

КОНКУРЕНТНИЙ РОЗВИТОК НАЦІОНАЛЬНИХ ЕКОНОМІК КРАЇН ТА РЕГІОНАЛЬНИХ СТРУКТУР НА ЗАСАДАХ ПРЯМОГО ІНВЕСТУВАННЯ ЦІЛЕЙ СТАЛОГО РОЗВИТКУ

The article examines the principles of competitive development of national economies in the context of regional structures on the basis of direct investment of current goals of sustainable development. Sustainable development is directly linked to people, their well-being and equality in their relations with each other in a context where an imbalance between nature and society can threaten economic and social stability. As climate change, its drivers, and policies engage with economic production and services, human settlements, and human societies, climate change is likely to be a significant factor in sustainable development in many areas. The paper considers the essence, components and goals of the concept of sustainable development, concepts, types and theories of global investment, as well as the basics and tools for financing sustainable development goals. An analysis of the current achievement of sustainable development goals by countries, an analysis of the dynamics of global investment flows as a source of financing for sustainable development goals and highlights the features of investment policy in the context of sustainable development. The considered perspective directions of improvement of modern investment programs for the purposes of sustainable development have been defined. The practical value of the results is to deepen the practical foundations of global investment for sustainable development, to develop forecasts and establish prospects for expanding investment in measures to ensure the implementation of the concept of sustainable development, taking into account all modern requirements. Thus, the goals of sustainable development have a great role for our planet and society; they can provide us with a quality future and bring to a high standard of living. The Sustainable Development Goals are a kind of call to action coming from all countries – poor, rich and middle-income. It aims to improve the well-being and protect our planet. States recognize that poverty eradication measures must be taken in parallel with efforts to increase economic growth and address a range of issues in education, health, social protection and employment, and to combat climate change and the environment.

U.S. in the global FDI’ flows: repatriation of foreign earning by U.S. from EU members as the new global trend

Scientific investigation covers the questions of U.S.’ involvedness into the international economic relations and into the international trade of goods and services and international movement of FDI as well. The fact that USA is the larger importer and the second exporter of goods in the world (2018), and the largest exporter and importer of commercial services (2018), the biggest host economy of FDI, and the largest investor (till 2017) the investigation of the American investment cooperation is the rather important affair, that can show the tough dependence of U.S.’ economy of foreign countries investments flows and regimes. In accordance with UNCTAD data U.S. is holding the first place as the exporter of FDI during the long period till 2018, that showed the negative number of FDI outflow in 2018 as the result of tax reform’ implementation at the end of 2017. Implementation of open and tough foreign trade policy (the policy of protectionism) through the import tariffs increasing is aimed at trade deficit reduction, protection and support of the American producers, implementation of tax reform at the end of 2017, making come true the soundbites of D. Trump “Make America Great Again” and “America first”. The author analyzed investment cooperation of U.S. and EU, its dynamic, specialization, directions. The author came to conclusion that correlation of United States’ investment indicators with European Union showed an unequal evaluation of each Union’ member and determined the disproportion of understanding and examination of regional integration not as the complex subject of the global economy but as the set of different and independent subjects. Investigation of U.S.’ FDI export and import statistics gave the author opportunity to come the conclusion that there is the specific of U.S.’ investment outflow into the European Union countries reflected through the limited set of investment recipients. At the same time, implementation of the tax reforms at the end of 2017 could lead to the changing of global investment flows from low tax jurisdictions to USA, for example.

China’s Global Investment and Maritime Flows in the Context of the Belt and Road Initiative

ABSTRACT This article aims to investigate mutual impacts between China’s global investment and maritime transportation system as a primary means for trading since the Belt and Road Initiative (BRI) has been launched. This study collected China’s global investment data categorized by independent economy entities with featured data, including investment capital, industrial field, and the maritime flows generated from the previous study. The country-level mutual relations in the context of the BRI are formulated and investigated by data-driven geographical visualization methods. The test results reveal both the degree and tendency of China’s initiative impacting the global investment and the possible patterns and inertial power of investment on a globally regional initiative, primarily focusing on the concerns and contributions of the maritime transportation system in promoting investment and the BRI.

The Impact of Digital Technologies on the Development of Entrepreneurship in Regional Socio-Economic Systems

The presented study focuses on a comprehensive analysis of digital technologies in the context of formation of priority directions for the development of regional socio-economic activities and deepening of business segments with allowance for the creation of innovative potential of economic entities.Aim. The study aims to develop a comprehensive approach to the formation of scenario approaches for the development of regional socio-economic systems in the context of the structural reorganization of the global economy.Tasks.The authors identify directions for the development of regional socio-economic systems in the context of digital technologies; assess the potential for entrepreneurship in segments that ensure the progressive development of regional socio-economic systems; develop recommendations for improving the performance of economic entities at the regional level of management.Methods.This study uses general scientific methods of cognition to comprehensively analyze the impact of digital technologies on the operation of regional economic entities within a common information space.Results.Business structures serve as a driving force in the use of information and communication technologies as they make it possible to increase the efficiency of production and provide competitive advantages in the long term. The structure of the global market of goods and services is transforming due to the rapid development of innovative technologies that accelerate the transition from the idea to the final product, its distribution and service. The global market determines the vector of progressive development based on the achievements of digital technologies in the long term. New organizational forms of regional socio-economic activity have formed under the influence of Internet technologies, reflecting the transition from marketing assessment of consumer behavior towards business models based on intellectual capital.Conclusions.The world’s largest IT companies have become major players in the international market of goods and services within the global digital space. Networking between economic entities is influenced by the dynamically developing active investment activity of leading enterprises. The capital market is currently transforming due to the increasing investment in international projects and programs by consortia and integration groups with the participation of major companies and countries that have the potential of using digital technologies. Global investment flows tend to increase in the segment associated with “mass-market” technologies. New opportunities for the development of entrepreneurship have emerged – for example, in the field of online games, e-commerce, and storage of database arrays. This process will inevitably reinforce the importance of global enterprises using intellectual capital and comprehensive analysis of data of the digital space of regional socio-economic systems. Global and local digital markets are transforming entrepreneurship, creating new organizational forms for its implementation in regions that have the potential to create intellectual capital as a tool for solving national socio-economic problems.

Transformation of banking in the new paradigm strategy of Ukraine’s development

The article considers the issues of transformation of banking into the new strategy of Ukraine’s development in conformity with the accelerating comprehensive transformations of the modern world. It is found that the crisis of globalization is deepening, resulting in the end of the industrial matrix of globalization and the beginning of post-industrial paradigm. It is pointed out that due to the networking transformation of the world a strategic perspective is rather an apolar world than a multipolar one, or a world of equivalent entities. This signals the end of Euro-centrism. In the paper, it is shown that Ukraine’s course to European integration should correlate with current Euro-integration strategies.The systematic analysis of the modern state of the economic backwardness of Ukraine was carried out and the dynamic model of development with the new industrial policy in the reform of the economy was used. A system analysis of the current economic underdevelopment in Ukraine is carried out and a dynamic model of development with a new industrial policy is proposed.Taking into account the deterioration of investment climate, Ukraine’s position in the global investment flows is determined. The structure of capital investments is analyzed by funding sources. In order to mitigate investment risks, a scheme of interaction between tools and instruments used for attracting investments to Ukraine’s economy is proposed. It is stressed that a sustainable stabilization of Ukraine’s banking system is a key driver for the recovery of the real sector. Since the banking sector has been and continues to be a leader and a driving force for reforms in the country, the current state of Ukraine’s banking system after a “big banking cleansing” is assessed. It is concluded that restoration of lending is an essential result received from the transformation of banking. The roots of non-performing loans in bank portfolios are defined and ways for restructuring non-performing loans are outlined. It is noted that addressing the problem of insider lending plays an important role in improving loan portfolios.

Inversión extranjera directa y la iniciativa china de La Franja y la Ruta

This paper analyzes the  trends  of global investment flows that show the  growing importance  of that which originates in the People’s Republic of China and can be associated with the initiative “La Franja y la Ruta” (in Spanish), also identified as “Belt and Road Initiative” and “One Belt, One Road” (BRI and OBOR). The main content of bri includes financing and investment agreements of infrastructure projects in several Asian, European and African countries, which would improve physical connections. In accordance with the working hypothesis, the economic impacts of BRI are important but even more are the geopolitical consequences that ratify China’s capacity to strengthen itself as a regional and global leader.

Planetary Health and the Global Financial System

• The financial system is not structurally well equipped to address long-term global public goods issues like planetary health. Relying on the financial system to solve planetary health is therefore challenging. • Planetary health finance should shift current global investment flows towards economic activities compatible with planetary health; it is also important to cease financing those activities that create environmental and health problems. • Public finance has a strong role to play in planetary health to support innovation and crowd-in private actors. • The volume of available financial capital appears to be large enough to be substantially mobilised for planetary health. • Nature conservation finance is a promising approach to target concrete impact on the ground, but it may be difficult to scale to global level. • There is a need to channel capital towards planetary health and manage the related risks to the financial system, but the traditional mechanics of risk pricing cannot work in this case because markets cannot manage the fundamental uncertainty and long time horizons at stake. • A precautionary approach to the financial risks associated with planetary health is needed, as is the application of a new approach to supervision and regulation of the financial system. • Mobilizing finance for planetary health is likely to require deeper regulation of the financial system, although measures taken will strongly depend on each country’s current approach to financial regulation.

Price and prejudice: the politics of carbon market establishment in Turkey

ABSTRACTDespite concerns on their effectiveness and legitimacy, carbon markets are often presented as the main tool of climate policy. Developing countries are particularly eager to establish and interlink their carbon markets to benefit from global climate investment flows. Turkey is a belated but willing player in this endeavor. In tracing the ambivalent politics of establishing a carbon market in Turkey, we focus on the perceptions of different actors vis-à-vis carbon marketization attempts. Using policy documents, 22 expert interviews, and process tracing, we question the underlying assumptions on carbon markets in a country with unambitious climate targets. Our findings suggest that the making of carbon market in Turkey is not necessarily a rational, national interest-driven process but instead one promoted by the international organizations including World Bank and the EU. We conclude that this preference for market-based instruments defer public interest, favor more incremental policies, and ignore distributive justice concerns.

Individual-Rights Screening of International Investments As An Instrument of EU External Trade and Investment Governance

How can Europe remain true to its values in the face of outside economic forces? In today’s multipolar world economy, the EU’s founding values are not necessarily shared or enforced by many of its important global trading partners. Other economic systems, such as ‘State capitalism’, ‘anarcho-capitalism’ or ‘crony capitalism’, which may be indifferent to the values enumerated in Article 2 TEU, make their presence felt through transnational interactions. Even where such values are shared, they may be differently enforced. Economic interactions may in fact encourage a ‘race to the bottom’ of the levels of enforcement. Both between and within nations (and within the EU itself), the dialectic between the enforcement of fundamental values and economic globalization means that those values are increasingly at risk of being undermined. This paper explores how individual rights (collectively, IRs)—chiefly fundamental or human rights, but also social and environmental rights—can be rendered enforceable on the international plane indirectly via multinational enterprises as agents of globalization. This approach stands in contrast with the existing paradigm of international economic law of placing the (sole) burden of IR compliance on State actors. The paper asks how a coordinated system of inward and outward IR investment screening and authorization can ensure that global investment flows are made conditional upon the observance of IRs. It is posited that IR screening would provide transparency and a legal remedy concerning the respect for fundamental societal values protected under existing international instruments, but which currently lack effective remedies of enforcement.

Dampak Penerapan Ifrs Terhadap Kualitas Laporan Keuangan Dan Arus Investasi

Objective of this study is to determine whether IFRS convergence will improve the quality of financial statements as indicated by decreasing levels of information asymmetry and declining real earnings management. IFRS convergence is measured by Dummy variables years before convergence and year after covergency while accounting quality reporting is measured by decreasing earnings management level and decreasing level of information asymmetry. Real earnings management uses abnormal cash flow, abnormal discretionary expense and abnormal production cost (Roydhuchory, 2006) while information asymmetry uses adjusted spreads. While the variable of investment flows is measured by the percentage of foreign investment ownership in Indonesia (defond et.al, 2011). This research uses a quantitative approach that aims to test the theory. The research method used is explanatory research. The sample of this study are all companies listed on BEI. Secondary data research data. From purposive sampling, 102 samples were obtained for IFRS convergence effect on Real earnings management and 100 companies to test the effect of IFRS convergence on asymmetry and information asymmetry on global investment flows. Methods of data analysis using linear regression analysis. The result of statistical analysis shows 1) that IFRS convergence has negative effect on real profit management. This indicates that the higher the IFRS convergence the real earnings management will decrease. 2) IFRS convergence has no effect on information asymmetry and 3) Information asymmetry has no effect on global investment flows in Indonesia.

Transformation of banking in the new paradigm strategy of Ukraine’s development

Transformation of banking in the new paradigm strategy of Ukraine’s development Bohdan Lutsiv Abstract The article considers the issues of transformation of banking into the new strategy of Ukraine’s development in conformity with the accelerating comprehensive transformations of the modern world. It is found that the crisis of globalization is deepening, resulting in the end of the industrial matrix of globalization and the beginning of post-industrial paradigm. It is pointed out that due to the networking transformation of the world a strategic perspective is rather an apolar world than a multipolar one, or a world of equivalent entities. This signals the end of Euro-centrism. In the paper, it is shown that Ukraine’s course to European integration should correlate with current Euro-integration strategies. The systematic analysis of the modern state of the economic backwardness of Ukraine was carried out and the dynamic model of development with the new industrial policy in the reform of the economy was used. A system analysis of the current economic underdevelopment in Ukraine is carried out and a dynamic model of development with a new industrial policy is proposed. Taking into account the deterioration of investment climate, Ukraine’s position in the global investment flows is determined. The structure of capital investments is analyzed by funding sources. In order to mitigate investment risks, a scheme of interaction between tools and instruments used for attracting investments to Ukraine’s economy is proposed. It is stressed that a sustainable stabilization of Ukraine’s banking system is a key driver for the recovery of the real sector. Since the banking sector has been and continues to be a leader and a driving force for reforms in the country, the current state of Ukraine’s banking system after a “big banking cleansing” is assessed. It is concluded that restoration of lending is an essential result received from the transformation of banking. The roots of non-performing loans in bank portfolios are defined and ways for restructuring non-performing loans are outlined. It is noted that addressing the problem of insider lending plays an important role in improving loan portfolios.