Telecommunications sector of Armenia and Baltic countries: the impact of foreign direct investment attraction
Economic Annals-ХХI: Volume 185, Issue 9-10, Pages: 99-107
Citation information:
Margaryan, A., Terzyan, H., & Grigoryan, E. (2020). Telecommunications sector of Armenia and Baltic countries: the impact of foreign direct investment attraction. Economic Annals-XXI, 185(9-10), 99-107. doi: https://doi.org/10.21003/ea.V185-10
Atom Margaryan
PhD (Economics),
Associate Professor,
Head, «Innovation-Institutional Researches» Scientific-Educational Laboratory,
Armenian State University of Economics
128 Nalbandyan Str., Yerevan, 0025, Republic of Armenia
atom.margaryan@gmail.com
ORCID ID: https://orcid.org/0000-0002-5998-2227
Haroutyun Terzyan
PhD (Economics),
Senior Researcher,
«Innovation-Institutional Researches» Scientific-Educational Laboratory,
Armenian State University of Economics
128 Nalbandyan Str., Yerevan, 0025, Republic of Armenia
harutterzyan@yandex.ru
ORCID ID: https://orcid.org/0000-0003-3469-2909
Emil Grigoryan
PhD Student (Economics),
Researcher,
«Innovation-Institutional Researches» Scientific-Educational Laboratory,
Armenian State University of Economics
128 Nalbandyan Str., Yerevan, 0025, Republic of Armenia
emil.grigoryan.1995@gmail.com
ORCID ID: https://orcid.org/0000-0003-0715-8866
Telecommunications sector of Armenia and Baltic countries: the impact of foreign direct investment attraction
Abstract. We examine the institutional and investment developments in the telecommunications sector of Armenia in the last two decades and compare them with those of the Baltic countries, namely, Latvia and Lithuania. In particular, directions of foreign investments made in the sector and the impacts on economic and technological systems of Armenia and the chosen Baltic countries have been thoroughly analyzed. During the analysis, an economic model has been used to assess the impact of foreign direct investments on the income (revenues) of the telecommunications sector of the countries under investigation. Econometric analysis made it possible to consider the above-mentioned links in more depth and in detail.
First, a correlation analysis has been carried out which has proved the validity of the hypotheses that there is a strong connection between FDI and the revenue of the telecommunications sector in Armenia and Latvia in the considered time period of 2009-2019. The causal roots of the relationships between the two variables have been studied.
After processing the statistical data and refining the model specifications, an econometric model for Armenia has been proposed with the help of which the key relationships have been clarified. The evaluated model, which satisfies the basic quality of econometric models, helped to draw important conclusions on the depth and nature of the impact of foreign direct investment volume on the income of the telecommunications sector in Armenia.
The model clearly shows the unstable influence of foreign direct investments on income, which confirms the riskiness of the Armenian economy as a whole, since the country has been in an economic blockade and in a state of war with a neighbouring state for more than 20 years.
Keywords: Telecommunications Sector; ICT; FDI; Investment Inflows; Sectoral Revenue; High-tech Industry; Econometric Model; Correlation; Granger Test
JEL Classification: E22; F21; L96
Acknowledgements and Funding: This work was supported by the RA Science Committee, in the framework of the research project No. 19T-5B015.
Contribution: The authors contributed equally to this work.
DOI: https://doi.org/10.21003/ea.V185-10
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Received 22.09.2020
Received in revised form 20.10.2020
Accepted 22.10.2020
Available online 21.11.2020
Updated version of the paper as of 27.12.2020