Complex method for investment climate and unsystematic investment risk analysis

Abstract

The paper describes the author’s methodology and information system for the investment climate and unsystematic investment risk analysis of national economies, territories, industries and enterprises. It proposed an analytical tool, which includes three interrelated elements: a matrix, the algorithm and the program, which is designed for the analysis of groups of factors and individual factors in each of the groups in their impact on the investment climate and as a result to develop diversification measures to reduce risks and increase the attractiveness of the investment, and at all levels of the economic hierarchy. Development, description and formalization of decision support system based on the original algorithm and the method for investment climate factors and investment risk analysis and the discount rate determination. The study directs at – consideration of methods for making investment decisions and determining investment risks on different economic levels, based on industry characteristics,– description of a new approach to the diagnosis of the investment climate with the authors’ «AVS-matrix»,– development of an advanced algorithm and a step by step method of investment risk (risk premium) determining in the system of «quotient-risk»,– description of a computer program realizing the author’s technique and decision support system, the formalization of subjective perception of objective quantitative risk assessments: Methodological basis of the studies are traditional methods of scientific analysis, economic and mathematical statistics, technical, economic and logical analysis, graphic and economic and mathematical modeling, etc. The advanced algorithm, step by step methodology and decision support system for investment climate and unsystematic investment risk assessment were described and formalized in the paper. Author’s certificate of software product state registration No. 2015663672 «The program for assess investment climate and unsystematic investment risk assessment» was obtained. The use of author’s technique will significantly reduce the role of the subjective factor in expert estimates and uncertainty factors, will improve the validity and reliability of the investment climate and investment risks assessments, and will help to make an adequate decision about risks elimination.