Influence of innovative tools financial market ukraine on foreign direct investments

Taras Leonidovych Kucher


Introduction. Foreign direct investment is critical indicator to ensure long-term growth of the Ukrainian economy. Investment attractiveness of Ukrainian companies and the ability to attract foreign investments are characterized by cost of equity. This parameter indicates the risk of investing in Ukrainian economy. Investment process takes place on the financial market, where financial instruments are tools for accumulation, distribution and redistribution. The implementation of innovative financial instruments can influence on the determinants of the cost of attracting investment. Decrease of cost of equity will make a positive impact on increase of foreign direct investment in Ukraine.

Purpose. The purpose of this research is an analysis of the potential impact of innovative financial instruments implementation in Ukraine on foreign direct investment and economic activity through cost of equity.

Researchmethodology. The methodological basis of the research is comparative and regression analysis.

Results. The impact of innovative financial instruments implementation on determinants of risk premiums as part of the cost of equity was discovered. The place of Ukraine on international investment market from 2000 till 2015 was demonstrated. Cost of equity which causes negatively related impact on foreign direct investment in Ukraine and comparable countries was analyzed and proven. The impact of using the innovative financial instruments on the cost of equity, FDI and economic activity via comparable countries regression analysis was proven. The results of comparable countries were extrapolated on Ukraine through model that demonstrates the impact of the implementation and use of innovative instruments on increasing FDI and economic activity in Ukraine. 


innovative financial instruments cost of equity; risk premium; foreign direct investment

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Science Works Journal "Ekonomichnyy analiz"

ISSN 1993-0259 (Print)  ISSN 2219-4649 (Online) DOI: 10.35774/econa

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