Investment potential forecast and strategies for its expansion: case of Ukraine

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In the current conditions of capital market liberalization, developing countries achieve a faster economic growth rate by actively attracting various types of foreign investment. The steady rise in the volume of foreign investment into the country could be achieved only due to its high investment potential.
Therefore, this study aims to develop the methodology for determining the dynamic changes in the country’s investment potential, and its relevant medium-term indicators identify the degree of informational technology influence on Ukraine’s investment potential. It is essential to define the position of Ukraine in the global context in terms of the level of information technologies as the catalyst for investment attractiveness.
The relevant indicators defining Ukraine’s investment potential were forecasted using the Brown-Meyer exponential smoothing model. To calculate the integral indicator of the investment potential, the Hurst exponent was applied. Kohonen self-organizing maps were used to group the countries according to their informational technology parameters.
Ukraine’s investment potential was found to decrease since 2019 and is equal to 0.6493 units in 2020 and 0.6407 units in 2021 due to the decline of the indicators describing the human capital, infrastructure, technological development, and socio-economic conditions. Technology has a significant influence on Ukraine’s investment potential. Its impact is rising each year from 1.70% to 5.17% and 13.04% between 2019 and 2021, respectively. According to the level of technology, Ukraine is in the group with Spain, Romania, and Poland since 2017.
The decreasing investment potential forecast and the positive influence of technology level on it bring the opportunity to form the priority areas for expansion of investment potential based on the adaptation of world instruments to implement the investment policy within national economic conditions.

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    • Figure 1. Graphical interpretation of retrospective and forecasted values of time series in the context of information technologies for 1999–2018
    • Figure 2. SOMs in the context of the grouping the countries according to their level of technology
    • Figure B1. Graphical interpretation of retrospective and forecasted values of time series in terms of socio-economic conditions and infrastructure for 1999–2021
    • Figure B2. Graphical interpretation of retrospective and forecasted values of time series in the context of science and education, as well as environment and human health, for 1999–2021
    • Figure B3. Forecasted levels of investment potential of Ukraine based on the Hurst exponent, taking into account the dynamics of technology growth and without it for 2019–2021
    • Table 1. Interim calculations of the trend equation of adaptive forecasting in terms of socio-economic conditions and infrastructure for 1999–2018
    • Table 2. Interim calculations of the trend equation of adaptive forecasting in the context of science and education, as well as environment and human health, for 1999–2018
    • Table 3. Intermediate calculations of the trend equation of adaptive forecasting in the context of information technologies for 1999–2018
    • Table 4. Estimated and forecasted values of the components of Ukraine’s investment potential based on the Hurst exponent in 2013–2021
    • Table 5. Grouping of the countries according to their level of technology using SOMs
    • Table A1. Information base for the study of investment potential of Ukraine in 1999–2008
    • Table A2. Information base for the study of the investment potential of Ukraine in 2009–2018
    • Data curation
      Volodymyr Kasianenko, Tetiana Kasianenko
    • Funding acquisition
      Volodymyr Kasianenko, Tetiana Kasianenko
    • Project administration
      Volodymyr Kasianenko, Tetiana Kasianenko
    • Resources
      Volodymyr Kasianenko, Tetiana Kasianenko
    • Supervision
      Volodymyr Kasianenko, Tetiana Kasianenko
    • Writing – review & editing
      Volodymyr Kasianenko, Tetiana Kasianenko
    • Conceptualization
      Juliya Kasaeva
    • Formal Analysis
      Juliya Kasaeva
    • Investigation
      Juliya Kasaeva
    • Methodology
      Juliya Kasaeva
    • Software
      Juliya Kasaeva
    • Validation
      Juliya Kasaeva
    • Visualization
      Juliya Kasaeva
    • Writing – original draft
      Juliya Kasaeva