Foreign direct investment: structural changes and impact on Ukraine’s economic security

Abstract

The article presents assessment of the level of investment security of Ukraine during 2006-2018. Most influential factors of the country’s investment security have been identified. They include structure of foreign direct investment (FDI), particularly its high research intensity. It has been identified that the integral indicator of investment security is highly sensitive to the change in the investment share of high-tech industries in total FDI volumes.

The regression analysis has confirmed significant influence of structural changes in foreign direct investment on the state of macroeconomic security of Ukraine during 2006-2018. The inverse relationship between unemployment rate and such indicators of FDI structure as investment share in high-tech industries and in metallurgical production has been identified. No correlation was found between unemployment rate and changes in the investment share in wholesale and retail trade, food, beverage and tobacco, information and telecommunications activities, financial activities and insurance in total FDI.

It is established that there is a close direct relation between GDP per capita and the change in the structure of FDI in the investment share in food, beverage and tobacco, information and telecommunications, financial and insurance. A strong direct relation between GDP growth rate and the change in total FDI share of investment in metallurgical industry and investment in high-tech industries was confirmed. A weak direct correlation is found between the Consumer Price Index and the shares in the FDI structure of investments in wholesale and retail trade and in high-tech industries. The inverse relationship is found between the Consumer Price Index and the share of investment in information and telecommunications activities in total FDI.