Financial Mechanisms of Regulatory Development of Entrepreneurial Activity of Agricultural Business Entitiese

Abstract

Market relations in the agrarian sector of the economy of Ukraine influenced the growth of the independence and commercial responsibility of agricultural business entities regarding the formation and rational use of financial resources. The development of market mechanisms for the regulation of agriculture, the liberalisation of the economy with the simultaneous reduction of the regulatory role of state management structures, without the appropriate preliminary elaboration of the legal, economic, and financial foundations of the transition to market relations led to an increase in the financial risks of many economic entities in the agricultural sector, which are successfully levelled at the expense of financial mechanisms of regulatory development of their entrepreneurial activity. An effective financial mechanism and an effective agrarian policy, its implementation, have been relevant in the context of scientific research for an extended period. Considering this, the purpose of this study was to substantiate a complete system of financial mechanisms for the regulatory development of entrepreneurial activity of economic entities in the agricultural sector of Ukraine. The study used economic and mathematical methods of analysis using statistical data of the EU and OECD countries for 1986-2020, using regression modelling of the interdependencies between the volumes of agricultural production and general state support to farmers, its volumes in terms of types, the influence of individual vectors of support for the total cost of products. The obtained studies indicate the need to develop measures related to the transformation of the system of financial mechanisms for the regulatory development of entrepreneurial activity of agrarian business entities of Ukraine, related to the prioritisation of mechanisms aimed at increasing the volume of investments in the agrarian sector of the economy, comprehensive development of the knowledge system, changes in the infrastructure of services, restrictions on control over the activities of business entities, the volumes of which in Ukraine substantially exceed similar indicators of the countries of the European Union with developed market relations and countries that are part of the OECD.