Rule of Low as Factor of Investments in Ukraine
Purpose: The purpose of this article is to study the dependence of investments in the Ukrainian economy on two components of the rule of law, namely, the protection of property rights and the fight against corruption (according to the American Heritage Foundation). Design/Methodology/Approach: Empirical assessments were made for two periods – 2000-2019 and 2010-2019, which aims to test the resilience of the obtained results to structural changes, which characterize the period after the global financial crisis of 2008-2009. Findings: The inverse relationship between the monetary unit's devaluation (in nominal and real dimensions) and investments is very convincingly traced, which can be explained by the significant import intensity of investment goods and technologies. The received dependence means that any attempts to maintain the hryvnia's reduced exchange rate, as observed since mid-2020, threaten to stagnate domestic investments. Practical Implications: According to the data of 2000-2019, it was found that more reliable protection of property rights can be considered as a factor of increasing investments, but the corresponding favorable effect weakens in the post-crisis period of 2010-2019. This corresponds to the empirical research for foreign countries, and at the same time, it allows to assert that the property rights had a stronger effect on the investments in the 2000s when state property was privatized and consolidated. Originality/Value: The budget deficit clearly hinders investments, which can mean preferences for private consumption and raw materials branches. Money overhang, which is determined by the difference between the actual and trend values of the monetary aggregate M2, could stimulate investments in the 2000s, but in the post-crisis decade of 2010-2019 creates a clear negative effect.