The transformative power of foreign direct investment in Ukraine’s market for corporate control

ABSTRACT

This article analyses the marketization of corporate control in Ukraine. To date, sceptical forecasts have identified Ukraine’s blurred EU accession perspective and the enduring volatility of its socio-economic institutions as the main cause for reluctant marketization. Drawing on a critical institutionalist approach, this article highlights the fact that Ukraine’s market for corporate control has undergone marketization to some extent. It delineates how inherent tendencies of the capitalist mode of production and the specific interplay between the state, transnational and domestic fractions of capital shape the marketization of corporate control in Ukraine. Foreign direct investment of transnational corporations from the Western European capitalist core has made Ukraine’s market for corporate control more active. Foreign investors together with domestic capital fractions successfully advocated a more market-enabling merger control regime, while the state and oligarchic capital fractions have simultaneously hampered these marketization dynamics and opted for the maintenance of market-correcting regulatory elements. A critical institutionalist approach allows us to shed light on mechanisms and dimensions which often go unnoticed in the literature on institutional change on the EU periphery.

KEYWORDS:

• EU
• Ukraine
• transnational capital
• marketization of corporate control
• critical institutionalism
• dependence on foreign direct investment

Acknowledgements

I would like to thank the anonymous reviewers for their constructive comments. I would also like to thank Joachim Blatter, Andreas Nölke, Denis Maier and Maria Turner for their help and their comments in the preparation of the article.

Disclosure statement

No potential conflict of interest was reported by the author.

Interviews

American Chamber of Commerce, November 2015, phone.

Antitrust Lawyer 1, October 2015, phone.

Antitrust Lawyer 2, October 2015, phone.

EU Project Team Leader, November 2013, Kiev.

Member of the AMCU’s Public Council, November 2013, Kiev.

Member of the parliamentary working group on antitrust reforms, November 2015, phone.

EU Representative DG Competition, December 2013, phone.

Representative EU Delegation, November 2013, Kiev.

Ukrainian Bar Association, October 2015, phone.

Additional information

Notes on contributors

Julia Maisenbacher

Julia Maisenbacher has been a Ph.D. candidate at the chair for Political Theory at the University of Lucerne. She is a postdoctoral researcher at the University of Lausanne. In her Ph.D. project, she analyzes the influence of transnational capital fractions on the marketization of corporate control in EU neighboring and candidate countries. She has published in journals such as Competition & Change, New Political Economy and European Journal of International Relations.