Institutionalization of State Support and Development of Sectoral Entrepreneurship of Rural Areas

Iryna V Forkun,Oleksandr S Prystemskyi,Olha S Chernenko,Iryna A Chkan,Inna Ye Yakusheva

doi:10.5755/j01.ppaa.20.3.28405

Abstract

The article presents the implementation of the results of supporting sectoral entrepreneurship in rural areas as a multifunctional and multi-channel process of formation, attraction, and use of financial resources provided by the rules of the institutional environment of state policy. A methodical approach to the integrated assessment of indicators of the target direction of the involved financial resources of the state and their impact on the development of sectoral entrepreneurship in rural areas is presented. It is proved that the specific criteria that determine the scenarios of consolidation of tax revenues to local rural budgets are minimization of discretion, compensation, and compromise, budget adequacy, complementarities, as well as the sequence of changes in parameters and flexibility of the tax system which allows responding quickly to changes in the institutional environment of state support of sectoral entrepreneurship. Indicators of state support for risk insurance of sectoral entrepreneurship, volumes of accumulated revenues of local budgets in decentralized rural areas of Ukraine are analyzed. A cognitive model is proposed. It determines the hypothetical ability of the multifactorial system of the institutional environment of state policy to influence the level of financial capacity of sectoral enterprises, taking into account the tax burden and targeted use of state financial resources for production, processing, and storage of agricultural products as well as to update the technological process

Highlights

The development and effective functioning of sectoral entrepreneurship, which in the dynamic socio-economic space requires a reorientation of state financial support for the proper use of land and production resources, requires comprehensive changes in tax policy, a significant reorientation of markets – from domestic consumption and trade to new world markets
The implementation of the results of state policy on the indicators of financial, economic, budgetary, and social development of rural areas allowed determining the priority of the target direction of the financial resources involved in the field of sectoral entrepreneurship
Substantiated and expanded comprehensive assessment of the impact of the institutional environment of state policy on the financial capabilities of entrepreneurship entities allowed taking into account the system of tax and social burden, determining scenarios of financial support for the technological process of production, processing, and storage of agricultural products

Summary

Introduction

The development and effective functioning of sectoral entrepreneurship, which in the dynamic socio-economic space requires a reorientation of state financial support for the proper use of land and production resources, requires comprehensive changes in tax policy, a significant reorientation of markets – from domestic consumption and trade to new world markets. The active position of the state on building the institution of local self-government in terms of the formation and implementation of local budgets requires a balanced and effective policy in the field of financial activities and strengthening the competitiveness of sectoral entrepreneurship in rural areas. The main difference between US policy and the EU is that the directions of development of sectoral entrepreneurship in rural areas are fixed within the framework of the Common Agrarian Policy, an integral part of which is sustainable development. While the US focuses on critical areas, they are not legally identified as rural development programs (Graskemper et al, 2021; Cullen et al, 2020)

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Conclusion