False Friends? On the Effect of Bureaucracy, Informality, Corruption and Conflict in Ukraine on Foreign and Domestic Acquisitions

Abstract

Ukraine had had its ups and downs in recent years. It has, for example, dramatically improved its ease of doing business (EOBB), and it has made some progress reducing the relative size and influence of its shadow economy (Shadow). But, the Russian invasion of 2014 (Conflict) forced it to take a few developmental steps backwards. In this paper, we consider the effect of these factors, positive and negative, on the number of mergers and acquisitions, involving Ukrainian firms. We construct a sample of 4030 acquisitions in the period 1 January 2000–31 December 2020. Our results suggest that while the number of acquisitions by domestic firms increases in efficiency (+EOBB), transparency (−Shadow) and peace (−Conflict), the number of foreign acquisitions increases in bureaucracy (−EOBB), in informality (+Shadow), and unrest (+Conflict). From an academic perspective, our findings fit with some recent work, while providing new insights too. From a policy perspective, our findings that the number of foreign acquisitions is negatively affected by Ukraine’s attempts to modernize and improve its economy and is positively affected by the ongoing conflict with Russia, makes us wonders what type of ‘false friends’ make such investments.

Enhancing Economic Security through Digital Transformation in Investment Processes: Theoretical Perspectives and Methodological Approaches Integrating Environmental Sustainability

“…The concept of economic security in investment processes encompasses the measures undertaken to safeguard investments against potential risks and uncertainties, including market volatility, geopolitical factors, and regulatory changes. Traditionally, investment processes have relied on conventional methods and manual practices, which may be time-consuming, prone to errors, and limited in their capacity to adapt to dynamic market conditions (Gonchar et al, 2022). However, with the advent of digital technologies, there is a growing recognition of their potential to revolutionize investment practices and enhance economic security while promoting environmental sustainability.…”