Assessment of the level of investment attractiveness of Ukrainian economy using multidimensional average method

Abstract

In the article it has been estimated the level of investment attractiveness of Ukrainian economy using multidimensional average method. For this purpose, it has been identified the structure of national investment attractiveness and determined five main components that are political, economic, social, scientific, technical, natural and geographical. Political component of national investment attractiveness is characterized by the following indicators: world press freedom index, economic freedom index, political freedom index, ease of doing business index. Economic component of national investment attractiveness is characterized by the following indicators: GDP per capita, unemployment rate, the government debt in GDP. Social component of national investment attractiveness is characterized by the following indicators: literacy rate, Gini coefficient, happiness index. Scientific and technical component of national investment attractiveness is characterized by the following indicators: number of scientists and engineers per million people, number of technological parks in the country, the research and development (R&D) effectiveness index. Natural and geographical component of national investment attractiveness is characterized by the following indicators: size of electricity production, share of renewable resources in region electricity generation, percent of agricultural land in the country. Listed indicators has been distributed on stimulants and disincentives and normalized. Results of calculations shown that the level of investment attractiveness Ukrainian economy is quite low (ICIA = 0.393) and even lower than in most analyzed countries (by 0.012 compared with Poland, by 0.023 compared with Hungary, by 0.049 compared with Romania, by 0.06 compared with Bulgaria) but it is higher than level of investment attractiveness of Moldavian economies. Integral coefficient of investment attractiveness in Ukraine is characterized by highest value of the general coefficient of natural resource component (GCN&G = 0.368). For comparison, in Poland value of that indicator equals 0.284, in Slovakia it equals 0.231, in the Czech Republic it equals 0.264. Instead, accord to the general coefficients of scientific and technical component, Ukraine is one of the outsiders of Eastern Europe: GCR&D = 0.162 in Ukraine, GCR&D = 0.363 in Moldova, GCR&D = 0.401 in Slovakia, GCR&D = 0.442 in Romania. In addition, general coefficients of economic and social components are quite low (GCE = 0.435 and GСС = 0.412 accordingly) due to a number of institutional and financial factors, namely imperfect legal framework, low level of trust of major market participants in government, low financial literacy of population, high probability of non-repayment of loans. In order to raise investment attractiveness of Ukrainian economy it is needed to create new industries and markets, reform the taxation system, to stabilize the banking system, ensure improvement of the work of insurance companies, create institutions that would be involved in mobilizing investment resources for specific investment projects and programs.