Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration

To analyze Ukraine's deep and comprehensive integration with the EU, we develop a multi-regional general-equilibrium simulation model incorporating heterogeneous firms and Foreign Direct Investment (FDI) in business services. This allows for consideration of (a) trade growth in new varieties; (...

Full description

Bibliographic Details
Main Author:	Olekseyuk, Zoryana
Format:	Journal Article
Language:	en_US
Published:	Taylor and Francis 2016
Subjects:	direct foreign investment DFI EU trade integration DCFTA
Online Access:	http://hdl.handle.net/10986/24265

id	okr-10986-24265
recordtype	oai_dc
spelling	okr-10986-242652021-05-26T09:05:19Z Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration Olekseyuk, Zoryana direct foreign investment DFI EU trade integration DCFTA To analyze Ukraine's deep and comprehensive integration with the EU, we develop a multi-regional general-equilibrium simulation model incorporating heterogeneous firms and Foreign Direct Investment (FDI) in business services. This allows for consideration of (a) trade growth in new varieties; (b) aggregate productivity changes attributed to reallocation of resources across and within an industry; and (c) productivity growth in manufacturing due to increased access to business services. The results indicate relatively small gains for the EU, whereas Ukraine benefits with a welfare increase of over 8%. The deindustrialization impact, previously found by Olekseyuk and Balistreri (2014) in a comparison of different modeling structures, is supported by our findings. Ukraine's welfare gains are higher under an Armington structure compared to monopolistic competition. This is due to a movement of resources into Ukraine's traditional export sectors producing under constant returns. Implementation of the FDI modeling approach and liberalization of barriers to FDI, however, mitigates the deindustrialization impact as multinational firms enter the Ukrainian market. This increases the number of available varieties and, consequently, induces productivity growth of manufacturing sectors due to improved access to business services as critical inputs. 2016-05-10T18:40:09Z 2016-05-10T18:40:09Z 2016-04-17 Journal Article The Journal of International Trade & Economic Development 0963-8199 http://hdl.handle.net/10986/24265 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Taylor and Francis Publications & Research :: Journal Article Publications & Research Europe and Central Asia Ukraine
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	direct foreign investment DFI EU trade integration DCFTA
spellingShingle	direct foreign investment DFI EU trade integration DCFTA Olekseyuk, Zoryana Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration
geographic_facet	Europe and Central Asia Ukraine
description	To analyze Ukraine's deep and comprehensive integration with the EU, we develop a multi-regional general-equilibrium simulation model incorporating heterogeneous firms and Foreign Direct Investment (FDI) in business services. This allows for consideration of (a) trade growth in new varieties; (b) aggregate productivity changes attributed to reallocation of resources across and within an industry; and (c) productivity growth in manufacturing due to increased access to business services. The results indicate relatively small gains for the EU, whereas Ukraine benefits with a welfare increase of over 8%. The deindustrialization impact, previously found by Olekseyuk and Balistreri (2014) in a comparison of different modeling structures, is supported by our findings. Ukraine's welfare gains are higher under an Armington structure compared to monopolistic competition. This is due to a movement of resources into Ukraine's traditional export sectors producing under constant returns. Implementation of the FDI modeling approach and liberalization of barriers to FDI, however, mitigates the deindustrialization impact as multinational firms enter the Ukrainian market. This increases the number of available varieties and, consequently, induces productivity growth of manufacturing sectors due to improved access to business services as critical inputs.
format	Journal Article
author	Olekseyuk, Zoryana
author_facet	Olekseyuk, Zoryana
author_sort	Olekseyuk, Zoryana
title	Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration
title_short	Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration
title_full	Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration
title_fullStr	Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration
title_full_unstemmed	Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration
title_sort	modeling of fdi in business services : additional effects in case of ukraine's european integration
publisher	Taylor and Francis
publishDate	2016
url	http://hdl.handle.net/10986/24265
_version_	1764456277925167104

Modeling of FDI in Business Services : Additional Effects in Case of Ukraine's European Integration

Similar Items