FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN UKRAINE: AN EMPIRICAL ANALYSIS
Abstract
This study provides an analysis of the impact of FDI on economic growth in Ukraine over the period from 2001 to 2023. Utilizing macroeconomic data and a fixed-effects regression model, authors assess the interaction between FDI and key structural variables, including R&D expenditure, government spending on education, and consumer price inflation. The findings reveal that both inflows of FDI and investment in R&D yield a statistically significant positive effect on GDP growth, with R&D demonstrating a particularly pronounced short-term impact. We found a negative correlation between inflation and government expenditure on education with economic growth, emphasizing the importance of macroeconomic stability and the often-delayed returns associated with educational investments. These results show the urgent need for government policy measures to improve the investment climate, prioritize innovation, and ensure long-term sustainable development in the post-war Ukrainian economy. The analysis underscores the pivotal role that strategic investments and macroeconomic stability play in fostering sustainable economic growth in the post-war period in Ukraine.
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