ALIGNMENT OF FISCAL AND CREDIT POLICIES FOR UKRAINE'S REGIONAL DEVELOPMENT BASED ON SPATIAL ANALYSIS OF CAPITAL INVESTMENT

Abstract

The subject of the study encompasses spatial spillovers of investment activity between adjacent regions and their significance for designing tax instruments to stimulate investment in territories characterized by a deficit of bank financing.

he article substantiates the mechanisms for aligning fiscal and credit policies for Ukraine's regional development based on a quantitative assessment of spatial multipliers of capital investments. Unlike studies that focus strictly on measuring spatial dependence as such, this paper utilizes the obtained spatial-econometric estimates as an empirical evidence base for designing differentiated tax and credit incentives.

The empirical framework is built upon a balanced panel dataset of 25 regions covering the 2016–2021 period; the spatial panel data models (SAR, SEM) are estimated via the maximum likelihood method within the R programming environment.Results of work. The findings indicate that the elasticity of capital investments with respect to gross regional product consistently exceeds unity, while the indirect spatial effect accounts for approximately 14 % of the total impact. Finally, the study proposes a "credit security strength \times spatial position of the region" matrix for targeting incentives and substantiates the principle of spatial calibration of tax benefits, taking into account the "leakage" effect of incentives into adjacent territories.

On this basis, it is argued that under conditions where bank lending finances merely 3.8% of capital investments and exhibits a pronounced spatial concentration, fiscal instruments (such as investment tax credits, differentiated rates, and accelerated depreciation) can perform a compensatory function to offset the weak credit supply in peripheral and frontline regions..