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

doi:10.1080/09638199.2016.1170193

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

dc.contributor.author	Olekseyuk, Zoryana
dc.date.accessioned	2016-05-10T18:40:09Z
dc.date.available	2016-05-10T18:40:09Z
dc.date.issued	2016-04-17
dc.description.abstract	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.	en
dc.identifier.citation	The Journal of International Trade & Economic Development
dc.identifier.doi	10.1596/24265
dc.identifier.issn	0963-8199
dc.identifier.uri	https://hdl.handle.net/10986/24265
dc.language.iso	en_US
dc.publisher	Taylor and Francis
dc.rights	CC BY-NC-ND 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.subject	direct foreign investment
dc.subject	DFI
dc.subject	EU
dc.subject	trade integration
dc.subject	DCFTA
dc.title	Modeling of FDI in Business Services	en
dc.title.subtitle	Additional Effects in Case of Ukraine's European Integration	en
dc.type	Journal Article	en
dc.type	Article de journal	fr
dc.type	Artículo de revista	es
dspace.entity.type	Publication
okr.associatedcontent	http://www.tandfonline.com/doi/full/10.1080/09638199.2016.1170193 Journal website (version of record)
okr.date.disclosure	2017-10-17
okr.doctype	Publications & Research::Journal Article
okr.doctype	Publications & Research
okr.externalcontent	External Content
okr.identifier.doi	10.1080/09638199.2016.1170193
okr.identifier.doi	10.1596/24265
okr.identifier.report	105356
okr.journal.nbpages	1010-43
okr.language.supported	en
okr.peerreview	Academic Peer Review
okr.region.administrative	Europe and Central Asia
okr.region.country	Ukraine
okr.topic	International Economics and Trade::Foreign Direct Investment
okr.topic	International Economics and Trade::Trade Finance and Investment
okr.topic	International Economics and Trade::Trade and Regional Integration
okr.topic	Private Sector Development::Business Development Services
okr.unit	Development Prospects Group (DECPG)
okr.volume	25(7)