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Sustainable development requires implementation of relevant green transformation of countries by providing green policies and extending green technologies and renewable energies. Withal, it requires attracting additional knowledge, human, financial, and natural resources. In this case, countries with higher investment attractiveness have a higher capability to attract additional knowledge and resources to implement mechanisms and policies to achieve sustainable development goals. The effectiveness of public governance is a basic condition for the successful modernization of the economy to develop a positive business climate and attract investment. The paper aims at analysing the impact of institutions’ quality on a country’s investment attractiveness. The objects of research are Ukraine and the EU countries. The study applies correlation and regression analysis to achieve the purpose of the research. The findings show that institutions’ quality has a positive and statistically significant effect on a country’s investment attractiveness in the EU countries. However, in political stability, freedom and quality of governance positively influence a country’s investment attractiveness. Improving political stability by one point promotes the integrated index of a country’s investment attractiveness for the EU country by 0.086 and for Ukraine by 0.016. The impact of the rule of law on a country’s investment attractiveness is not statistically significant. This means that Ukraine has not formed an appropriate and affordable legislation base for attracting investors to the country. Thus, the Ukrainian government should pay attention to legislation for the regulation of social and economic development and energy and resource use.

Authors: Bogdan A. Moskalenko, ORCID: https://orcid.org/0000-0003-3972-1705 Joint stock company “ProCredit Bank”, Business Client Advisor, Kyiv, Ukraine Pavlin Mitev, ORCID: https://orcid.org/0000-0001-5798-4192 Joint stock company “Raiffeisenbank EAD”, Credit Risk Policy Manager, Bulgaria Pages: 95-101 Language: English DOI: https://doi.org/10.21272/fmir.4(3).95-101.2020 Download: Views: Downloads: 26 7 Abstract The article summarizes the arguments within the scientific challenge on improving approaches to country investment potential evaluation. The main objective of the research is to systematize the existing statistical methods of decomposing macroeconomic time series into growth (trend) and cyclical components. Systematization of theoretical and methodological materials on solving the problem of decomposing the trend and cyclical components of time data series showed that the use of filtering series of economic dynamics based on the Hodrick-Prescott filter allows identifying long-term growth trends or recessions. The relevance of solving this problem is that the country investment potential evaluation is often based on investigating the impact of foreign direct investment`s determinants in a domestic economy while ignoring cyclical macroeconomic processes within and outside the country, on which those determinants often have not responded yet or reacted late. The methodical tools of the research are carried out in the following logical sequence: systematization of existing statistical methods for trend component decomposing; analysis of data that will be used in the decomposition process and in further country investment potential evaluation; application of the Hodrick-Prescott filter and trend component decomposing in foreign direct investment net inflows dynamics into the economy of Ukraine. The Research methods combine in following dimensions: comparative analysis, regression analysis and univariate methodology of time series decomposing. The period from 1999 to 2019 was chosen as the research period. The object of the research is foreign direct investment net inflows into the economy of Ukraine, as they are the determining element within the country investment potential evaluation process. The article presents the results of empirical analysis, which showed that the decomposing a trend and cyclical components of foreign direct investment inflows can improve the quality of investment potential evaluation, considering the impact of current economic cycle phase. The results of the research can be useful for a more accurate investment potential evaluation on the macroeconomic level and forecasting foreign direct investment inflows for the following time periods. Keywords: business cycle synchronization; country investment potential; foreign direct investment; Hodrick-Prescott filter; national economy.

The article summarizes the arguments within the scientific challenge on improving approaches to estimate the environmental impact of FDI inflow on the economy. The main objective of the research is to systematize the existing statistical approaches to analyze whether and how the macroeconomic determinants could impact the environment in terms of greenhouse gas emissions. Systematization of theoretical and methodological materials on solving the problem of choice of applying more or less stringent environmental regulations with addition to more efficient industrial technologies which are supposed to have a positive impact on the environment. The relevance of solving this problem is that inceptive of FDI inflow could provide the economy with resources that reduce pollution, create better conditions for workers and local citizens. On the other hand, FDI is not interested in investing in economies with strict environmental legislation. The methodical tools of the research are carried out in the following logical sequence: the systematization of existing statistical methods panel data analysis; analysis of data that will be used in the estimation model and in further country environmental policymaking process; application of fixed and random effects models in estimation of the environmental impact of FDI on analyzed data. The research methods combine in the following dimensions: comparative analysis, regression analysis. The period from 1999 to 2018 was chosen as the research period. The objects of the research are foreign direct investment net inflows into the Baltic-Black Sea region countries` economies and their impact on its environment. The article presents the results of empirical analysis, which showed that FDI inflow has an impact on the environment, but it is severely limited by other more significant determinants. The pollution haven hypothesis in the Baltic-Black Sea trans-national region countries policy in attraction FDI has not been proved considering more strict high-standard environmental legislation in EU countries alongside with increase in GHG emission per capita. The results of the research can be useful within government policy-making processes considering the aim to incentivize FDI inflow. Keywords: country investment potential, environment, foreign direct investment, greenhouse gas emission, national economy.

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Introduction. The problem of country investment attractiveness, and approaches to its evaluation have been thoroughly debated over few last decades. Attracting of foreign direct investment (FDI) that is dedicated to creation of new jobs and added value in Ukraine, is relevant since independence declaration in 1991 and until now. It is believed, Ukrainian economy has unlimited investment potential, and reasonable high level of investment attractiveness, based on its geographical location and existing natural resources. Apparently, based on open access data, Ukraine has one of the worst in Europe FDI and GDP dynamic. Thus, the fundamental studies considering concept of “country investment potential” is highly relevant due to current macroeconomic condition in Ukraine. Within this work, authors researched recent studies of investment attractiveness evaluation around the world, and assumed their common principles. purpose of the research is to review most recent publications around the world on country investment potential evaluation topic. Results.The authors researched current relevant publications in journals which are indexed by international research databases. The analysis has shown that vast majority of current studies are connected to emerging market economies such as China and India. Among those papers, the most common approach to evaluate country’s investment attractiveness was usage of statistical methods. It allows considering a reasonably significant number of independent variables. Based on UNCTAD data [1], emerging economies show the best dynamic data related to GDP growth, and FDI inflows and outflows within last decade. According to abovementioned, the authors focused the research related to developing countries. Prospects. The Future researches could be long-term promising within the direction of country investment potential evaluation, taking into consideration socio-cultural determinants of specific countries in relevant statistical models.

Urgency of the research. Theoretical and empirical studies show that investment allocation has a perceptible impact on local economic development. Target setting. Taking into consideration reasonably low quantity of high-quality investments, countries all over the world are eager to incentive foreign direct investments inflows. Therefore, realistic country investment potential evaluation is vitally important for respective government institutions within their policies getting done. Actual scientific researches and issues analysis. The major issues of country investment potential evaluation, and investment market in general, were made by the following scientists and technicians: O. Fedonin, I. Riepina, O. Oleksiuk, S. Lieonov, B. Chub, Ie. Lapin, J. Dunning, A. Thompson., D. Kaufmann, M. De Melo, K. Berden, S. Sarno, P. Buckley, A. Fukumi and others. Uninvestigated parts of general matters defining. At the same time, insufficient scientific works cover approaches to assessing investment potential of Ukraine, based on latest research results of foreign scientists within current topic. Current socio-economic determinants of foreign direct investment need to be studied. The research objective is to identify key determinants of foreign direct investment inflow in the economy of Ukraine. The statement of basic materials. The article have considered determinants of foreign direct investment inflows, which are related to country socio-economic development and state institutions indicators. Conclusions. Studies of statistics of groups in transition economies have shown that the simultaneous adoption indicators of socio-economic development and quality of public institutions into the model of country investment potential evaluation allows to evaluate the elasticity of foreign direct investment to changes in each of the determinants.

The article summarizes some arguments as regards the scientific challenge on improving approaches to evaluating the country’s investment potential. The main objective of the research is to identify the features and perspectives of applying the variables such as the shadow economy and the integrated institutional quality index into a model evaluating the country’s investment potential. To solve this task, systematization of the related theoretical and methodological materials has been done. The methodological tools of the research are carried out in the following logical sequence: systematization of existing statistical methods for estimating the shadow economy; time data series analysis; and regression analysis. The scope of the shadow economy could be estimated as a dependent variable, with both its determinants and indicators detected and measured. The macro methods, such as Multiple Indicators Multiple Causes (MIMIC) are suitable approaches from an econometric standpoint to evaluate the shadow economy. Institutional quality is crucially an important variable for empirical studies related to evaluating the country’s investment potential. The proposed approach considers significance and direction of the six Worldwide Government Indicators’ (WGI) impact on foreign direct investment net inflow, eliminating the issue of their multicollinearity. However, political instability and high frequency of foreign and domestic policy changes during the last decades distort statistical significance of the results obtained. FDI inflow, as well as the quality of governance, and the shadow economy, is influenced by many other factors, both internal and external, so to build a qualitative model for evaluating the country’s investment potential of the national economy it is necessary to expand the set of factors for analysis. The results of the research can be useful for a more accurate investment potential evaluation on the macroeconomic level, and forecasting foreign direct investment inflows for the following time periods.