The relevance of the topic of development of theoretical and methodological approaches to investment system regulation under influence of unproductive capital outflow is justified by significance of financial capital movements from groups of countries to others, caused by inappropriate institutional support for strategic investments. Aim of the proposed research is the development of methodological approaches to study and regulation of investment system development that allow to provide analysis of actual modern tendencies of investment system development, to estimate the influence of capital outflow on financial provision of investment process and to design regulating framework for shortening of unproductive financial capital outflow. The work is dedicated to research of theoretical, methodological and applicable basis of investment system development regulation in aspect of reducing of unproductive financial capital outflow with calculation of possible effect from involvement of reduced volumes of capital outflow into investment process. The research methodology, which is based on sustainable development and principle of balance of the stakeholders’ interests, includes approaches of system, theoretical and empirical analysis that allows us to identify the sense and structure of investment system in a sample of Ukraine and other 11 countries. Due to the statistical and econometric methods the estimation of the dynamics and regularities of capital investments are explored and the role of financial capital outflow in economic development of the country is estimated as percentage of GDP and as potential implicit resource that can be involved in investment process. The authors propose the methodology of investment system research and regulating from positions of institutional support embittering for renewal of invested capital and for attraction of new strategic investors. The provided systematization of theoretical positions in the sphere of investments and capital migration allows to obtain the definition of sense of investment system, to discover the regularities of its development and to identify the phenomenon of unproductive outflow of financial capital. It is found that the main criteria of unproductivity of capital outflow is excess of losses and expenses for national economy, caused by such migration of resources, under possible benefits. Conclusion. The hypothesis of existence of direct positive dependence of unproductive outflow of financial capital from growth of the national economic is proved in a sample of Ukraine due to the use of empirical statistical study method. It is identified that the key factor that provokes capital outflow is inappropriate institutional support for strategic investments. The proposed model of estimation of correlation between capital investments and value added allows to calculate the possible economic, social, and budgetary effect from involving into economy of Ukraine investments saved from outflow, that can result in more than 22.6 bln USD of value added growth.
How to Cite
investment system, capital outflow, illicit financial flows, reinvestments, reproduction of capital
Burkynskyi, B. V., Laiko, O. I., & Talpa, V. P. (2018). Tax instruments of investment development stimulation: international experience and national realities. Economic innovations, 20(1), 32–43. doi: https://doi.org/10.31520/ei.2018.20.1(66).32-43
Dhar, A. (2021). Identification of Extreme Capital Flows in Emerging Markets. International Review of Economics & Finance, 71, 359–384. doi: https://doi.org/10.1016/j.iref.2020.09.002
Global Financial Integrity. (2020). Financial capital outflow monitoring. Retrieved October 28, 2020 from http://www.gfintegrity.org/issues/data-by-country/
Heiets, V. M. (2006, November 17-24). Spetsialni ekonomichni zony: «chorni diry» chy tochky ekonomichnoho zrostannia? [Special economic zones: "black holes" or points of economic growth?]. Dzerkalo Tyzhnia. Available at: https://zn.ua/ukr/macrolevel/spetsialni_ekonomichni_zoni_chorni_diri_chi_tochki_ekonomichnogo_zrostannya.html
Heiets, V. M. (2016). Ukraine’s economy: key issues and prospects. Economics and Forecasting, 1, 7–22. doi: https://doi.org/10.15407/eip2016.01.007
Holz, C. A. (2020). Understanding PRC investment statistics China Economic Review. Volume 61, June 2020. doi: https://doi.org/10.1016/j.chieco.2020.101461
Ilyina, A. (2017). Investment climate evaluation as an effective detection method for negative impacts on country`s development. Baltic Journal of Economic Studies, 3(5), 162–169. doi: https://doi.org/10.30525/2256-0742/2017-3-5-162-169
Kazuo Ueda (1990). Japanese capital outflows. Journal of Banking & Finance Japanese capital outflows, 14(5), 1079–1101. doi: https://doi.org/10.1016/0378-4266(90)90027-Y
Laiko, O. I. (2014). Transformation processes in the investment system of the economy of Ukraine. Odessa: IMPEER of the NAS of Ukraine.
Lunina, I., Bilousova, O., & Frolova, N., (2020). Tax reforms for the development of fiscal space. Baltic Journal of Economic Studies, 6(3), 48–58. doi: https://doi.org/10.30525/2256-0742/2020-6-3-48-58
Paskhaver, O. Y., & Verkhovodova, L. T., & Aheieva, K. M. (2007). Velykyj ukrajinskyj kapital: vzajemovidnosyny z vladoju i suspilstvom [Great Ukrainian capital: the relationship with power and society]. Kyiv: Dux i Litera.
Scott Davis, J. & Van Wincoop, E. (2018). Globalization and the Increasing Correlation between Capital Infows and Outfows. Journal of Monetary Economics, 100(December 2018), 83–100. doi: https://doi.org/10.1016/j.jmoneco.2018.07.009
The National Bank of Ukraine (2020). The balance of payments. Retrieved October 28, 2020 from https://bank.gov.ua/en/statistic/sector-external/data-sector-external
The National Bank of Ukraine. (2019). Inflation Report 2019. Retrieved October 28, 2020 from https://bank.gov.ua/en/monetary/report
The National Bank of Ukraine. (2020). Official Exchange Rates 2020. Retrieved October 28, 2020 from https://bank.gov.ua/en/markets/exchangerates?date=2020-12-03&period=daily
The State Statistics Service of Ukraine. (2019). Capital investment sources 2010–2019. Retrieved October 28, 2020 from http://www.ukrstat.gov.ua/operativ/operativ2007/ibd/iokjf/iokjf_e10-13_bez.htm
The State Statistics Service of Ukraine. (2020). Index of capital investment by type of economic activity for 2020 (to corresponding period of previous year). Retrieved October 28, 2020 from http://www.ukrstat.gov.ua/operativ/operativ2020/ibd/iki_ed/ikedvp_2020.xlsx
UNCTAD. (2019). Global investment trends in 2019 and beyond. Retrieved October 28, 2020 from https://unctad.org/press-material/global-investment-trends-2019-and-beyond
Vartsaba, V., & Leshuk, H. (2017). Еvaluation of investment attractiveness indicators of regions in Ukraine. Baltic Journal of Economic Studies, 3(5), 38–44. doi: https://doi.org/10.30525/2256-0742/2017-3-5-38-44
World Bank. (2020) GDP growth (annual %) – Ukraine. Retrieved October 28, 2020 from https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=UA
World Investment Forum. (2018). Official statements 2018. Retrieved October 28, 2020 from https://worldinvestmentforum.unctad.org/2018-official-statements