№ 7/2019

Fìnansi Ukr. 2019 (7): 7–34https://doi.org/10.33763/finukr2019.07.007

FINANCES OF THE INSTITUTIONAL SECTORS

DANYLENKO Anatolij ¹

¹Institute for Economics and Forecasting of NAS of Ukraine
OrcID ID : https://orcid.org/0000-0002-9753-5831

Financing and economic ways for promoting an increase in competitive production

The systemic lack of financial resources (both at the state and company level) became a major drag on financing investment, which in turn limited the grounds for competitive production. The absence of necessary technologies and modern fixed assets holds back 50% of additional output in Ukraine. Thus, it was important to obtain the economic assessment of available sources of funding (own funds, public funds, loans) and some other potential sources of funds for supporting and developing investments. Another major issue is the development of an economic mechanism that would ensure the selection of competitive investment projects and promote innovative production. Our research is focused on these issues. While the author covered in previous scientific works the issues of possible sources of financing of investment, this article for the first time outlines an improved selection of indicators for the evaluation of enterprises’ performance and mechanisms for stimulating thereof. The results of the research suggest that the volume of exports and imports substitution can be one of the indicators for assessing investment projects supported by the state and aimed at the supply of competitive products. These indicators can replace existing indicators used to assess performance of corporations. At the same time, the author suggests facilitating the growth of fixed assets at enterprises. The enterprises’ profits should underpin the growth in those indicators as the best international practices suggest (e.g. South Korea). The research also shows that Ukraine can significantly boost financial support for investment projects through long-term state loans (inter alia from the Ukrainian Development Bank), public procurement, external loans, etc. There can also be some public support from the Budget if the system of personal taxation is improved. The conclusions of the research show a way for a stronger role of the state in supporting investment and competitive production.

Keywords:investment financing, local and general government funds, own funds of enterprises, Ukraine’s public debt, exports, import substitution, tax benefits on income tax, innovative products, personal income taxation

JEL: E21, F21, H21, H54

Danylenko A. . Financing and economic ways for promoting an increase in competitive production / A. . Danylenko // Фінанси України. - 2019. - № 7. - C. 7-34.

Article original in Ukrainian (pp. 7 - 34)

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