Foreign investment: a factor for enhancing domestic

Abstract

The link between attracting foreign investment, building up the competitive capacities of the Ukrainian economy in the conditions of limited domestic resources and intensifying the innovation activity in course of reforms is analyzed. It is emphasized that their mix, once occurs, lay the solid ground for competition-driven operation of national business entities in the domestic and external environment. An analysis of Global Competitiveness Index components is made to show that the competitiveness at country level cannot be enhanced unless all the competitiveness factors are present, first and foremost the factors increasing the effectiveness of institutional environment (elimination of corruption or bureaucracy, protection of property rights), political stability and improvement of tax regulation, modernization of technological base in industry and effective labor market, which will ensure trust from businesses and investors. It is emphasized that the effective institutional and economic mechanism for attracting foreign capital, designed to cohere the priorities of the state with the priorities of businesses and investors, is central for accumulating the financial resources capable to enhance the global competitiveness of the country and its business sector.