Foreign investment in the development of Industry in East-Central Ukraine in 1882-1917

Abstract

The article examines the impact of foreign capital on the development of the industrial potential of Central-Eastern Ukraine during the period of rapid industrialization in the Russian Empire at the end of the nineteenth and the beginning of the twentieth century. It analyzes the historical circumstances that facilitated the large-scale economic involvement of investors from France, Belgium, Germany, and other European countries.

The aim of the study is to determine the role and significance of foreign investment and the industrial enterprises established by European entrepreneurs in shaping the economic, demographic, and sociocultural development of the Central-Eastern Ukrainian regions, as well as their contribution to the formation of the industrial historical-geographical region of the Donbas.

The research demonstrates that the imperial government’s protectionist policies, combined with abundant natural resources and an accessible labor force, created favorable conditions for the implementation of foreign industrial projects. Western entrepreneurs, investing in mineral extraction and metallurgical production, received exceptionally high profits within short periods, which in turn attracted new investors, stimulated market activity, encouraged labor migration, and accelerated urbanization.

Special attention is given to the emergence of corporate towns – urban settlements that developed around large enterprises founded by foreign industrialists and their influence on demographic change and the formation of new social identities among the local population. Some of these settlements evolved into monofunctional towns whose economies were based on a single industrial sector supported by several companies.

The study shows that the introduction of Western technologies, technical standards, and managerial practices contributed to the large-scale exploitation of the region’s mineral resources, the inflow of capital, and the integration of industrial production into European market relations.

Funding. This article was prepared with financial support from the project of the Department of World History at Oles Honchar Dnipro National University, “European multiculturalism as an experience and a path for Ukraine’s European integration” (project No. 101127866 – EMKEpaUEI, registration card No. 5475), implemented within the EU ERASMUS+ Jean Monnet programme.