Impact of EU Investment Programs on the Ukrainian Market

Andrei-Viorel Tatar and Ioan Chirila
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Andrei-Viorel Tatar: University of Babes-Bolyai, Faculty of Economics and Business Administration, Romania
Ioan Chirila: University of Babes-Bolyai, Faculty of Economics and Business Administration, Romania

from University of Primorska Press

Abstract: Entrepreneurship is the pillar of modern economics it is one of the most important indicators of both a free market and a functional democracy. Both of which allow and lead to the growth of a country and to further development of the region. They allow for collaboration and implicit growth of any and all involved partners. When it comes to Eastern Europe the novelty of both these concepts has been made apparent in the years since the collapse of the USSR. By integrating these countries in the mechanism that is the European Union (EU) most of them have grown and flourished. The continuous instability of Eastern Europe and in our case Ukraine has led to a reaction from its western neighbor the EU. Certain members of the EU have created a specific mechanism for former USSR republics, called the Eastern Partnership (EaP). EaP has different components that aim to stabilize the current economic and political climates. The aim of this paper is to analyze the economic measures provided by the EU and specifically designed for SME’s in Ukraine. Methodologically we are using qualitative data to show the impact this program had in the Ukrainian economy. Further, by assessing GDP based indicators as well as Foreign Direct Investments (FDI) which derives from Eastern Partnership financial instruments, we are able to quantify the economic performance of Ukraine during the past ten years (2006-2016). In addition to the data mentioned above we are looking at SME centric data such as the number of active enterprises on the Ukrainian market and their share within it. All this leads to a comprehensive image of the development of the Ukrainian economy, specifically the impact on SME’s. Furthermore, we can assess the impact foreign investments in particular EU aids/funds/programs have had on SME’s compared to the more traditional and readily available internal funding sources. The main finding of this paper is that with all the help and funding programs and most of the EU aids that have been implemented and brought over to Ukraine very little was achieved in the way of progress. The country has not yet recovered from the loss it sustained after it broke all ties with Russia.

Keywords: SME’s; sustainable growth; Ukraine; Eastern partnership; entrepreneurship (search for similar items in EconPapers)
Date: 2017
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