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2020-06-02 [ ]

Regional development and foreign direct investment in transition countries

a case-study for regions in Ukraine from Michael Getzner and Serhiy Moroz

This paper evaluates the effects of foreign direct investment (FDI) on
the economic development of Ukrainian regions based on selected
indicators (gross regional product, change of gross regional product,
share of the industrial (manufacturing) sector, and employment and
unemployment rates) in the 2003–2016 period. Employing an
exploratory panel time-series approach, the results suggest that
there is only a limited impact of FDI on the economic performance
of the regions. The small influence of foreign direct investments is,
among others, a consequence of political instability, weak governance,
the military conflict in the East of the country, and incompleted
reforms of the Ukrainian economy. We suggest that it is necessary to
focus on targeted programs at both the regional and state levels in
order to enhance the existing state of the economy. It is also
important to ensure stability and transparency in the legislative
processes, tax reforms, and other policy fields to facilitate the attraction
of foreign direct investment, the creation of new jobs, and the
increase of the income levels of the Ukrainian population.

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