INVESTMENT DEALS IN THE INTERNATIONAL IT SERVICES MARKET AS A MECHANISM FOR THE REDISTRIBUTION OF TECHNOLOGICAL COMPETENCIES

Abstract

Abstract. The article proposes a conceptual interpretation of investment deals in the international IT services market as a mechanism for the redistribution of technological competencies, rather than merely a form of cross-border capital movement. The IT services market is conceptualized as the intellectual-service core of the global ICT space, distinguished by the dominance of intangible assets, the decisive role of human capital, high mobility of technological competencies and platform-based business models. It is substantiated that classical theories of foreign direct investment and mergers and acquisitions, developed for material-oriented sectors, have limited explanatory capacity when applied to a market where the object of a transaction is not a physical asset but a team, an algorithm, a client base or a position within a digital value chain. A typology of investors in IT services is proposed, distinguishing strategic technological acquirers, private equity funds and venture capital, each characterized by distinct investment logics and effects on market structure. The wave theory of consolidation is applied to demonstrate that M&A activity in IT services follows cyclical patterns linked to technological adoption curves, creating preconditions for strategic forecasting. Particular attention is given to the position of Ukraine as a territorial cluster of the global IT services market, whose investment attractiveness is shaped by the combination of human capital concentration, cost competitiveness and the geopolitical context of armed conflict.

The scientific novelty of the research lies in the integration of the resource-based view, the knowledge-based theory and the concept of profiting from innovation into a unified analytical framework for interpreting investment deals in the sector of intangible assets. A cascading model of the investment cycle is developed, describing the sequential interaction of three investor types - venture capital, private equity funds and strategic acquirers - where activity at each level serves as a predictor of activity at the next. Technological shock is identified as a sector-specific generator of consolidation waves, distinguishing IT services from material-oriented industries where merger waves are typically driven by deregulation or macroeconomic shifts. The position of the Ukrainian IT sector is substantiated through the categories of VRIN (valuable, rare, inimitable, non-substitutable resources) resources and complementary assets, demonstrating that knowledge-intensive assets exhibit structural resilience to geopolitical disruption and that the post-conflict context creates preconditions for the accelerated integration of Ukrainian IT companies into European digital value chains.

Conflict of Interest: Olena Pryiatelchuk serves as the Executive Editor of the journal. The peer-review process and editorial decision-making for this article were conducted independently of the author to avoid any potential conflict of interest.

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Received: 12.02.26 / Revised: 28.02.26 / Accepted: 18.03.26 / Published:30.03.26