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Investigation of the character and significance of the impact of labor market factors on the country’s investment attractiveness

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  • V. Koibichuk
  • T. Bezbakh

Abstract

In recent years, there has been a significant structural impact of the so-called «digital» economy on the formation of FDI flows. The development of advanced technologies and robotics is accelerating. All this makes production more sophisticated, cheaper and faster. Progressive labor market is a good basis for the successful development of enterprises in various industries. And investments make it possible for industries to be created, to develop, and to innovate. In addition, foreign direct investment is an important method of technology transfer that stimulates domestic public investment flows, and fosters the development of human capital and institutions. The purpose of the article is to develop an economic and mathematical model of the dependence of a country's investment attractiveness on labor market factors. The influence of labor market factors on the investment attractiveness of Ukraine is analyzed and thoroughly substantiated, as well as the state of the Ukraine’s modern labor market, whose characteristic features, possible tendencies, and prospects are determined. The factors of the labor market include value added per worker, medium and high-tech exports as a percentage of total exports, the unemployment rate, and the gross enrollment rate for higher education. Investment attractiveness is determined by the volume of foreign direct investment. When developing the model, the authors substantiate comparability of the input data, their statistical significance and the correlation of factor variables with foreign direct investment income. The Irwin method was used to check for anomalies of values, and recommendations were made for eliminating such data if they were found. The normality of distribution was verified using the Shapiro-Wilk test. The construction of a multivariate linear regression model was performed using the Stata 14 statistical package.

Suggested Citation

  • V. Koibichuk & T. Bezbakh, 2020. "Investigation of the character and significance of the impact of labor market factors on the country’s investment attractiveness," Economy and Forecasting, Valeriy Heyets, issue 2, pages 80-96.
    • Handle: RePEc:eip:journl:y:2020:i:2:p:80-96
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    References listed on IDEAS

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    1. World Bank, 2019. "Doing Business 2019," World Bank Publications - Books, The World Bank Group, number 30438.
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    3. Constantin ANGHELACH & Ioan PARTACHI & Cristina SACALÃ & Alexandru URSACHE, 2016. "Using econometric models in the analysis of the correlation between the evolution of the Gross Domestic Product and Foreign Direct Investments," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 64(10), pages 124-129, October.
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