SOCIAL DIMENSION OF FOREIGN DIRECT INVESTMENT IN UKRAINE
Abstract
The article presents study of the social impact of foreign direct investments (FDI), specifically focusing on their connection with poverty levels in Ukraine. It examines how FDI influences various social indicators to illuminate the ways foreign capital inflows affect the well-being of the population in a developing economy undergoing various changes. Significant attention is devoted to analyzing modern theoretical frameworks regarding FDI's impact on poverty reduction. It also provides an extensive review of both foreign and domestic empirical studies, highlighting the diverse and often contradictory results found in existing literature. To substantiate the theoretical discussions with empirical evidence, the research employs a wide array of mathematical and statistical tools using modern software for data analysis. Techniques such as correlation coefficients and time-series analysis are applied to identify and quantify relationships between FDI parameters—like investment assets, inflows—and poverty indicators, including income levels. The study formulates and investigates several hypotheses concerning the correlation between different parameters of FDI dynamics and economic growth with individual indicators of poverty and well-being. By exploring these hypotheses, the research aims to identify specific patterns and causal links that could inform policy decisions. Advanced econometric techniques, including Granger causality tests, reveal a two-way causal relationship between certain FDI parameters and poverty indicators. This finding suggests that FDI not only potentially influences poverty levels but that the state of poverty and economic well-being in the country can also affect the magnitude and nature of FDI inflows. Such bi-directional causality highlights the interdependent relationship between foreign investment and socio-economic conditions. The article offers possible interpretations of the results. These insights provide valuable guidance for forming economic policies, especially in the context of Ukraine's post-war recovery efforts. By understanding the nuanced effects of FDI on poverty, policymakers can devise strategies that maximize the benefits of foreign investments while mitigating adverse social impacts. The study acknowledges the limitations and complexities of the research, leaving considerable space for further investigation to deepen the understanding of this critical issue.
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