ASSESSMENT OF INVESTMENT CLIMATE FACTORS AS UNSYSTEMATIC RISK

Abstract

The efficiency of invБринestment activity, depends, on the one hand, on the validity, relevance and objectivity of investment decisions, that is on the methodology and methods of justification of investment decisions, and on the other hand, it depends on the mechanisms of investment objects choice. This paper proposes an original way of consistent assessment of the investment climate factors and unsystematic risk on the basis of the by authors developed «AVS-matrix.» Rating of the investment climate attractiveness is primarily a problem of identifying and measuring the main factors forming investment climate. For this purpose the authors have developed the «AVS-matrix», which presents the factors determining the investment climate in their manifestation at different hierarchical levels of management, particularly on «enterprise – industry – region – national economy (country) level.» The proposed matrix can be used to assess the factors that determine the investment climate, and risks having unsystematic, diversifiable nature. As is known, the risks being uncertainties significantly affect the real value of expected return of investment projects. Therefore, development of methods for adequate risk assessment seems to be very actual. Calculated with «AVS-matrix», the evaluation of the investment climate attractiveness and investment risk becomes an objective basis to develop ways of reforming the investment policy on hierarchical levels of management in order to increase the investment attractiveness of the enterprise, industry, region and the country as a whole. It allows not only to take an appropriate decision to invest in specific projects , but also to develop for each level of management effective measures to enhance the role of positive factors and reduce the impact or eliminate barrier and limiting factors that cause increased risk and hamper investment.