PR - Motives For Foreign Investment In Agriculture: Western European Investment In Ukraine

Agricultural enterprises in the European Union (EU) are confronted with rising competition and significant structural change, which has been aggravated by the EU accession of the ten New Eastern European Member States in 2004 and 2007. There is empirical evidence that an increasing number of agricultural enterprises carry out activities in more than one region or country or relocates, but statistical data on a microeconomic level on these enterprises and investors is not existent. We analyse the scope and characteristics of and the motives for foreign investment in primary agriculture at the example of Dutch, Danish and German investment in Ukraine. A survey conducted in 2006 reveals that the investors and investment motives in agriculture differ considerably. However, more than half of the investors have an agricultural background. Out of these enterprises 93 % had at least one investor who continued to run his agricultural enterprise in the home country. This shows that there are agricultural enterprises in Western Europe which are going international.

Keywords: foreign direct investment, location theory, agriculture, Ukraine.