MODELING OF THE IMPACT OF TRADE VOLUME WITH EUROPEAN REGION ON GDP OF UKRAINE

Liubov KIBALNYK, Oksana TYMOSHENKO

Abstract


Introduction. In today’s world of globalization of economic activity and liberalization of inter-regional and intra-regional trade, development and definition of promising directions of foreign trade relations, expansion of markets and diversification of sources of supply are of the utmost importance for most countries.

For Ukraine, intra-regional cooperation remains one of the most promising and important areas of foreign trade relations. This is confirmed by the fact that exports of goods and services in 2018 European countries amounted to $ 26411.02 million or 55.7% of total exports. Imports of goods and services in 2018 from European countries amounted to $ 37056.07 million or 65% of total imports.

Despite the fact that absolute export and import indicators in 2018 show a negative trend in view of the prolonged volatile political situation in the country, relative indicators continue to grow after the sharp decline of 2015 and are almost at the same level as before the war period. As a result, foreign trade relations with European countries are of great importance for Ukraine, contributing to the need for a thorough study, given the current trends in regional economic development.

Purpose. Тo determine the effect of trade volumes with the countries of the European region on the GDP of Ukraine using correlation-regression analysis.

Results. In the course of expansion of world integration processes, far-reaching directions of research are elaboration of attractive directions of foreign trade activity of Ukraine within the framework of intra-regional trade activity. The correlation-regression analysis showed that France is the most attractive country for selling Ukrainian products, because if export increases by 1% of Ukraine’s GDP it will grow by 1.12%. With increased exports to countries such as Germany, the United Kingdom and Russia, GDP fluctuations will be small but positive. Despite the geographical neighborhood with Poland, increasing exports to the country will help to reduce GDP by 0.2%. However, it we have on increase in imports of goods from Poland, Ukraine’s GDP will increase by 0.65%. A slight increase in imports  are goods from Russia and Germany implies a slight increase in GDP of Ukraine.

Originary. Despite the considerable amount of work of both foreign and domestic scientists on this issue, it should be noted that the issues of impact of trade relations of Ukraine with the countries of the region on the domestic economy and GDP are still poorly understood.

Conclusions. In the article it is proved that for the study of impact of trade of Ukraine with the countries of the region on the general level of economic development it is efficient to use multifactor econometric models. The results show that Ukraine’s GDP is significantly dependent on the dynamics of intra-regional trade in the European region. This is explained by the fact that a significant share of export-import operations in the total volume of international trade of Ukraine falls precisely in the countries of this region. Close interaction within the European region, relative proximity to domestic markets impact the need to intensify Ukraine’s foreign economic relations with European countries, provided that targeted trade policy is improved.


Keywords


export, import, trade dynamics, economic development, correlation-regression analysis, multifactorial model, GDP, European region

References


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