The Regional Dimension of the Impact of Foreign Direct Investment on Host Economies: the Case of Ukraine
Abstract: This paper contributes to the evaluation of the impact of FDI on host countries by taking into account the regional dimension of FDI spillover effects. The methodology accounts for the effects of FDI on the change in technology as well as the change in efficiency of domestic firms. The empirical analysis focuses on Ukraine. The conclusions indicate that foreign presence has negative effects on the productivity change in Ukraine and on technical change. The nature of the impact of foreign presence on the performance of firms in the western and eastern parts of the country differs. It is argued that the results reflect a complex nature of FDI inflows into the two distinct parts of Ukraine as well as deep economic and institutional difference within the regions.
