Investment development of countries in conditions of global asymmetries increasing

Economic Annals-XXI: Volume 131, Issue 7-8(1), Pages: 13-17

Citation information:
Ivaschuk, I., & Zapukhlyak, V. (2013). Investment development of countries in conditions of global asymmetries increasing. Economic Annals-XXI, 7-8(1), 13-17. https://ea21journal.world/index.php/ea-v131-04/

Iryna Ivaschuk
D.Sc. (Economics),
Professor,
Ternopil National Economic University, Ukraine
i.ivashchuk@mail.ru

Vitaliy Zapukhlyak
PhD Seeker,
Ternopil National Economic University, Ukraine
zapukhlyak.v@gmail.com

Investment development of countries in conditions of global asymmetries increasing

Abstract. Introduction. The problems of countries socio-economic development asymmetries increasing are connected with their ability to attract foreign direct investments (FDI) and to use them effectively in order to overcome the impact of the world financial crisis and to improve internal financial situation. Countries on different stages of economic development have not similar approach to the foreign financial resources usage, and developing countries often lack a clear view concerning their internationalization.

Purpose. To find out asymmetries of countries investment development and its connection with tendencies in their socio-economic conditions changing, to propose measures for investment stabilization.

Methods. Statistical instruments of the program package STATISTICA 8.0 were used to form and estimate linear multifactor regression of the world FDI amount dependence from the FDI amounts by groups of countries, and also the algorithm of clustering method to form investment clusters for 183 countries of the world.

Results. The tendencies in the world social, economic and investment development are represented. The amounts of investments in the world since 2011 are higher than before the crisis. Using UNCTAD data, the authors have grouped investment flows by countries, shown their dynamics in time, and made such conclusions as: 2009 was the hardest investment year; countries with transitive economics occurred to be the most resistant to the external influence and they may attract more investment in future years; decrease of the world investment inflow is connected with lowering investment activity of the developed countries. To find out if there is dependence between the world FDI amount and the FDI amounts by groups of countries within the type of the country’s economics (country with developed, developing or transitive economics) the lineal multifactor regression was formed. As the result, such dependence was proven, and namely strong determination of world FDI amount by the developed countries FDI amount was shown. The authors formed 7 clusters of 183 countries which have similar levels of foreign direct investments, using the World Bank data for 2003-2011. The analysis has proven strong asymmetries in countries investment development. The highest FDI level has Cluster 2 (Britain, USA, China); medium higher FDI level has Cluster 1 (Australia, Brazil, Hong Kong, Russia, Singapore); high FDI level has Cluster 7 (Belgium, Spain, Canada, France); medium lower FDI level has Cluster 4 (India, Italy, Mexico, Saudi Arabia, Switzerland, Sweden etc.); cyclically changing from medium to law investment level has Cluster 3 (Austria, Luxembourg, The Netherlands, Hungary); much lower FDI level has Cluster 5 (Argentina, Bulgaria, Israel, Japan, Egypt, Nigeria, Norway, Poland, Romania, Turkey, Ukraine etc.); permanently law level of FDI has Cluster 6 (136 countries). The authors consider that more investments should be redirected to developing countries to overcome socio-economic imbalances and problems of poverty. They have generalized the reasons which caused shown asymmetries of the global investment development, they are: ignorance of economic risks at business and state levels despite of international organizations forecasts; increase of speculative investment deals; usage of non-transparent financial instruments; lack of financial innovative practice; inadequacy of structural and investment reforms in separate countries; protectionism measures in investment sphere.

Conclusions. Investment development asymmetry in the world causes not only economic, but also strong social diversification among countries. There is a potential for bigger investment inflow for countries with transitive economies. Statistical cluster analysis represents alternative to traditional combination of countries by the level of foreign direct investments. It also targets 136 densely populated countries with law economic development and not effective investment strategies. In order to stabilize investment development of different countries and soften asymmetries a number of measures have been proposed: to overview global financial and investment stability regulators of G20; to consolidate efforts of international organizations towards counteraction protectionism of all kinds and investment regimes liberalization; to work out common standards for countries investment development indicators; to forward investments to human capital development in accordance with the principles of sustainable development in postindustrial epoch.

Keywords: Asymmetry; Global Transformation; Investment Protection; Investment Development; Socio-Economic Development; FDI; Investment Cluster

JEL Classification: F02; F21; F29

References

1. State of World Population (2012). By Choice, Not By Chance: Family Planning, Human Rights and Development.
   Retrieved from http://www.unfpa.org/public/home/…/pid/12511
2. Therborn, G. (2011). Global uncommonness: class comes back.
   Retrieved from http://www.isa-sociology.org/global…1/russian.pdf (in Russ.)
3. Delіagin, M. (2001). Information revolution, globalization and world economic crisis.
   Retrieved from http://vasilievaa.narod.ru/ptpu/9_1_01.htm (in Russ.)
4. Spens, M. (2013). The next convergence: future of economic development in the world which lives on different speeds. In O. Filatocheva (Ed.), A. Kalinina (Trans. from Eng.). Moscow: Haidar Institute Publishing (in Russ.).
5. The Millennium Development Goals Report (2012). Official web-site.
   Retrieved from http://www.un.org/millenniumgoals/11_MDG%20Re
6. UNCTAD (2011). Towards a New Generation of Investment Policies (World Investment Report 2012).
   Retrieved from http://www.unctad-docs.org/UNCTAD-WIR2012-Ov
7. UNCTAD Statistics (2013). Foreign direct investment.
   Retrieved from http://unctadstat.unctad.org/ReportFolders/reportFolders.aspx?sRF_ActivePath=p,5&sRF_Expanded=,p,5
8. Bell, D. (1999). Coming postindustrial society: experience of social forecasting. In V. L. Inozemtsev (Trans. from Engl.). Moscow: Academia (in Russ.).
9. Ivashchuk, I. O. (2007). Taxation initiatives in the global space. Ternopil: Handbooks and Manuals (in Ukr.).
10. Friedman, J. (2010). The next 100 years: forecast of the XXI century events. In A. Kalinin, V. Naritsa, & M. Matskovskaya (Trans. from Engl.). Moscow: Eksmo (in Russ.) .
11. Ivashchuk, I. O. (2013). New tendencies and global challenges of international relations development. Skhid (The East), 1(121), 19-23 (in Ukr.).

Received 01.07.2013