for the Ukrainian Economy Issues of Evaluating Indirect Effects from Foreign Direct Investment
Theoretical approaches to analysis of indirect effect from foreign direct investment (FDI) on the Ukrainian economy are studied. The process of direct investment is a very dynamic phenomenon: when reacting on the market or political reality it keeps generating new complex organizational forms, thus outpacing the efforts for its theoretical substantiation. Approaches to assessment of indirect FDI effect for a national economy still remains a blank in the above problem.
Indirect FDI effect constitutes an unexpected FDI effect, i. e. an unintended one. In the current economic literature such effect is referred to as “spillover” effect. It means that an investment object is saturated by actions or information (in broader sense) to the extent that their scopes exceed the internal needs of the object and become in a way accessible by other objects, with unexpected (positive or negative) effects for them. Therefore, the principal feature of spillover effect is in its being an uncontrolled effect on a foreign object that has a contact with a direct investment object. This effect can be either positive or negative.
Statistical challenges in assessing spillover effects from FDI occur in many dimensions. The most problematic thing is that spillover effects can hardly be measured in quantitative ways and have rather qualitative manifestations. To be assessed, spillover effects of each FDI need to be comprehensively classified by type, mechanism and vector. As the problems related with assessment of FDI effects are multifaceted, they can be dealt in a multidisciplinary way, with engaging experts in economics, social policy, statistics and econometrics. Once solved, they offer a powerful tool for analysis, control and substantiation of managerial decision making on macroeconomic policy.
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