Essays on Investment Patterns in Ukraine

The events in Ukraine in 2014 had an impact on the global economic and political relations. The annexation of Crimea and the “hybrid” war in the East of the country stopped many international agreements and brought about changes in the Ukrainian economy. Against this background, we analyze the location choices of firms in Ukraine, how they realize their competitive advantages, and we also estimate a mechanism of deepening integration through participation to Global Value Chains (GVCs). The main aim of this thesis is to provide different perspectives on the study of a firm’s location choice in Ukraine and positioning of Ukrainian firms in the GVCs. Nevertheless, in the second chapter, we also provide some descriptive analyses of macroeconomic stability and international trade in Ukraine during the conflict and provide some recommendations. In the third chapter, we estimate the location behavior of firms before the conflict and find that the negative impact on the location choice in the regions currently in conflict began long time ago. We relate their possible relations to the privatization processes. Moreover, we investigate the general pattern of location choice of firms in Ukraine, using a unique dataset of 251,201 firms, showing the impact of key drivers, that have a significant impact on the location of new and innovative economic activities. Finally, in the fourth chapter, we estimate the position of Ukrainian firms on the supply chain with respect to their parents, showing that subsidiaries of multinational enterprises in Ukraine are closer to final goods production.