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Home > Journal of Hospitality Financial Management > Vol. 31 (2022) > Iss. 1

 

Type of Submission

Refereed Article

Abstract

The aim of the study is to identify the factors which determine the scale of attraction of foreign portfolio investments to Ukraine. The authors carried out an economic and mathematical modeling based on the E-Views software product to identify the most influential factors in attracting foreign portfolio investment in the Ukrainian economy. The statistical analysis covered 16 observations for the period 2006-2021. A multivariate regression model was built, tested for heteroscedasticity, and authors identified the cause-and-effect relationships between the main groups of indicators (exogenous and endogenous) and the parameters of foreign portfolio investment. The results of the modeling have shown: the existence in the long period of a combinatorial impact of factors of endogenous and exogenous origin on the size and dynamics of attracting foreign portfolio investment in the economy of Ukraine; the existence of a strong link between the volume of attracted portfolio investment and indicators which can be identified as exogenous, in particular, the globalization index and the economic freedom index; the authors propose to evaluate the investment attractiveness index in view of its dual nature as reflecting the influence of both endogenous and exogenous determinants. Prospects for further research in this direction may be an assessment of the impact of Ukraine's EU candidate status on the capitalization of its domestic stock market and the attention paid to it by non-resident companies both from the EU and outside its borders; the search for relevant strategies for the balanced issuance of sovereign securities of the state of Ukraine according to national security criteria in the conditions of various scenarios of the duration of the war and subsequent post-war recovery. Practical implications: the conceptual provisions and conclusions formulated by the authors on the basis of the conducted econometric modeling make it possible to optimize regulatory policy measures in terms of institutional support for conditions and factors promoting the investment attractiveness of the Ukrainian market for international companies making both direct and portfolio investments. It will create the prerequisites for overcoming the imbalance in the portfolio investment structure formed in previous decades in the direction of reducing the share of its debt component, in particular sovereign Eurobonds, and increasing corporate securities. As a result, it will be possible to increase the level of capitalization of the stock market of Ukraine, to fill the economy with financial resources for the sake of economic development and public welfare.

DOI

http://dx.doi.org/10.7275/ss6z-2b16

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