Download Features investment environment functioning of enterprises in

Features investment environment functioning of enterprises in
agriculture
Datsenko Iryna, PhD student of NULES of Ukraine
The paper identifies the key features of the investment environment
functioning of enterprises in the agricultural sector during the economic crisis.
Defined interaction investment risks, potential activity of business entities and
their impact on the investment attractiveness of businesses during the economic
crisis.
Keywords: investment environment, enterprise, agriculture, business,
economic crisis.
Formulation of the problem. Investment processes in the agricultural
sector has its own specifics, they are a number of features. The essence of
investment in agriculture is the account of investors of all aspects of business, from
the weather, long production cycle, the study of modern implementations in the
agricultural production of advanced management methods, methods of effective
agricultural production, the use of new generations of technology, the use of new
strategies for personnel policy and so on. It is therefore important to characterize
the data features and evaluate them.
Analysis of recent research and publications. The problem of investment in
farms devoted to scientific work of economists, including: I.A. Blank, A.P.
Haidutsky, O.M. Harkusha, S.A. Hutkevych, M.I. Kisil, V.I. Topiha, A.V. Chupis
et al. However, some problems are still not fully resolved. These alone to include
issues related to the characteristic features of the investment environment
functioning of enterprises in the agricultural sector in the modern world.
The main part . Purpose of this article is to determine the characteristics of
the investment environment functioning of enterprises in the agricultural sector
during the economic crisis.
The main material.
As you know, capital is one of the factors of production, that is one of the
key resources which need to properly use to create products. The volume of
sufficient capital in cash and no cash makes a solid foundation for the growth of
production of goods. In the present circumstances difficult to independently
provide an idea, plan, project, etc. sufficient amount of equity, and it is the practice
of attracting investors that would aim to make the best use its accumulated capital
and as a result get the maximum profit. In a market economy, the availability of
investment in agricultural enterprises is a prerequisite for development and growth.
Scientists, economists [1] have studied the mechanisms of interaction
between investment potential and investment risk of the entity, but in Figure 1.
author has identified features of the investment environment in times of economic
crisis.
Reducing investment attractiveness
Factor variable (X = f (X1; X2))
Increased investment risks (X2)
Reducing investment potential (X1)
The decline in investment
activity entities
Resultant variable (Y = f (X))
Reducing the level of implementation of investment attractiveness entities
The ratio of investment activity in the investment potential (E = Y / X)
Figure. 1 Features of the investment environment in the economic crisis
The figure shows that the implementation of the investment attractiveness of
businesses are directly dependent on investment risk and investment potential, and
change in the future such factors as the level of risk can significantly affect the
implementation of investment attractiveness.
Expectations each index value, which is taken into account in assessing the
investment potential and investment risk can be calculated by the formula:
Ii=Bi*Pi
(1)
where Ii - hopes value of action i-th differential (primary) target;
V - scoring and second differential (primary) target;
Ri - index weight and the second differential (primary) index.
Expectations generalized index value assessment of the investment potential
(IP) and investment risk (IR) is proposed to be determined by a formula similar to
(1), using the values and aspirations of the weight coefficients for groups of
indicators, which form a generalized assessment.
However, direct investment precedes the decision to invest in a certain idea,
plan, project, etc.. An investor must evaluate all aspects of business, including
conditions and traditions of doing business in the country.
Ukraine has traditionally been considered an agricultural state, because it has
fertile soil, plenty of land for agricultural purposes, mainly rural areas, and more.
Recently, the World Bank and IFC "Investment Climate in agribusiness" has
published its ranking of countries attractive for business. Among the 185 countries
(Doing Business 2013) Ukraine took place 137, becoming close with countries
such as Lesotho (South Africa), the Philippines, the Palestinian Territories (Gaza
Strip and West Bank of the Jordan River) and others. Although Ukraine has a
positive trend in this ranking compared to last year rose by 15 points - from 152 to
137 seats, but the present is a neighborhood in the ranking clearly indicates the
presence of some serious difficulties for investment in agribusiness in Ukraine.
Consider the features of the investment environment functioning of
enterprises in the agricultural sector in Ukraine. First, in agriculture, besides the
usual risks attached also natural and weather. Secondly, the difficulty in controlling
the production process and product quality over large areas of farms. Third, the
agricultural sector is characterized by long production cycle, which leads to a long
payback period. Another feature is the conditions that most people do not find
attractive, so changing agricultural cornfield for office work. The fifth feature is
the significant differences in the region, the companies that have business all over
Ukraine. In addition to these, there are also difficulties in obtaining credit for
business. But the realities of the world still argue that the world needs investment
in agricultural business, about 1 billion people in the world today are not getting
the proper amount of food, and while the world population is increasing annually
by 2.5%.
Scientists, economists [2; 3; 5] argue that if deficiencies in the enterprise
would be a matter exclusively allocation of funds to address the problem, then it
would be profitable businesses with nothing bad ever happened. Truth problem lies
in the lack of professional cash management on farms.
In modern conditions farmers Ukraine responding to global challenges and
in order to survive and multiply capital tend to the world of globalization, to the
horizontal and vertical integration. It helps companies become more influential in
the markets and enter new standards increase the number of areas to improve the
technical equipment to be more stable and steadfast in times of crisis.
In the XXI century. changes occurring in the business world with
unprecedented speed for the last century, and large powerful agricultural holdings
now attracted the attention of investors is much more than other agricultural
formation, they have larger production scale, and thus willing to offer faster returns
to investors. But often changing and unpredictable business environment in
Ukraine standing in the way of drawing up investors and no competitive advantage
today does not guarantee survive tomorrow.
It is important to note two main positive aspects of investment in agricultural
enterprises of Ukraine. First is the high potential agricultural enterprises (including
fertile soils with a high content of black soil), and unlike other industries, the
agricultural market of Ukraine during the global financial crisis, one of the few to
save the positive dynamics.
Investment projects should work proactively in business, and therefore:
1) First you need to invest in promising areas;
2) investments should be systematic and objective. The lack of consistent
and systematic state innovation sphere indicates a lack of consistent and systematic
approach to development [4];
3) investment should include short and long term;
4) need to invest in continuous innovation, only innovations enable always
be competitive in the market, and sometimes one step ahead;
5) need to invest capital in employment, continually increasing the level of
both managers and employees, encouraging them with new knowledge and skills
to be a company that invests in them;
6) invest in a socially responsible business that would care about the
population of regions, infrastructure areas and regions;
7) invest in logistics companies. This is why in the case of lack of modern
agricultural formation for efficient operation.
An enterprise shall not be regarded as an object separated from external
influences, so it is said that the negative effects of corruption, bureaucratic
processes, qualification of personnel is not bound by standardizing products and
other negatively affect the quality of the investment projects.
Increase the effectiveness of laws and respect for their implementation in the
agricultural business and investment will reduce risks for investors to increase
investment potential, and hence the level of investment attractiveness of
agricultural enterprises. Consideration and protect the interests of investors of
investment as small, medium and large businesses will help to increase production
capacity in Ukraine through new investments. So to minimize the risks in
agriculture is one of the crucial factors for attracting investment.
The benefits that have so far is far enough for investors in the agricultural
sector of Ukraine will soon fast reality. One of the main features is that investors
should take advantage of, is to be the first to invest in agricultural enterprises of
Ukraine. This is implemented to give the opportunity effectively to the
particularities of the investment environment.
Conclusions and recommendations. The economic crisis in agriculture
affects the undertakings which agribusiness, and according to the quantity and
quality of investment attraction in them. Taking into account the main features of
the investment environment functioning of enterprises in agriculture, such as the
concentration of agricultural land to large agricultural holdings, horizontal and
vertical integration, and others are important for better attract investment.
Understanding these features investments in farms certainly give impetus to
positive changes in the agricultural sector and to effectively invest.
Enterprises agrarian sector of Ukraine require more positive environment for
growth and development, such as the legislation should be more clear, clear, run,
lack of corruption, and political stability that investors can easily, simply and in a
short time to invest in agricultural enterprises of Ukraine.
Economic Impact
features investment environment functioning of
enterprises in the agricultural sector requires additional studies and will be
described in subsequent studies of the author.
List of used literature:
1) Epifanov A. Credit rating and investment attractiveness of entities:
monograph / AA Epifanov, NA Dekhtyar, TN Miller et al. / Ed. Ph.D. A.
Yepifanova. - Amounts: UAB NBU, 2007 - 286 p.
2) Dabrowski S.F. The issue of legal support investments in agriculture
[electronic resource] / SF Dombrowski // university research note. - 2008. - № 4. S. 218-220. - Mode of access: http://nbuv.gov.ua/j-pdf/Unzap_2008_4_45.pdf
3) Yevchuk L.A. Some aspects of investment resources of the agricultural
sector enterprises / LA Yevchuk // Agrosvit. - 2011. - № 15. - S. 2-4
4) Latynina M.A. Investment and innovation to ensure the development of
the agricultural sector [Text] / MA Latynina, Y. Ulianchenko // Theory and
practice of public administration, 2013. t.Vyp. 2.-S.140-148
5) Levytsky C. As razrabotat Strategy: praktycheskye recommendations on
the creation of realistic strategies rabotayuschyh / S. Levytsky; Lane. with the
English. VA Shagoyan. - Dnepropetr .: Balance Club, 2003 - 328 p.
В статье определяются главные особенности инвестиционной среды
функционирования предприятий в аграрной сфере в условиях экономического
кризиса. Определена взаимодействие инвестиционных рисков, потенциала,
активности
субъектов
хозяйствования
и
их
влияние
на
уровень
инвестиционной привлекательности субъектов хозяйствования в условиях
экономического кризиса.
В
статті
визначаються
головні
особливості
інвестиційного
середовища функціонування підприємств в аграрній сфері в умовах
економічної кризи. Визначена взаємодія інвестиційних ризиків, потенціалу,
активності суб’єктів господарювання та їх вплив на рівень інвестиційної
привабливості суб’єктів господарювання в умовах економічної кризи.