THE ECONOMIC CONTENT AND MAIN FUNCTIONS OF DERIVATIVE FINANCIAL INSTRUMENTS / ԱԾԱՆՑՅԱԼ ՖԻՆԱՆՍԱԿԱՆ ԳՈՐԾԻՔՆԵՐԻ ՏՆՏԵՍԱԿԱՆ ԲՈՎԱՆԴԱԿՈՒԹՅՈՒՆԸ ԵՎ ՀԻՄՆԱԿԱՆ ԳՈՐԾԱՌՈՒՅԹՆԵՐԸ

Financial capital, which functions separately from real capital, in violation of the persistent historical and economic interdependence between them, which is manifested in the redistribution of value created by real capital through financial capital, is fictitious. Experts believe that the share of speculative capital in world financial flows is approximately 85%, and only 15% is from the real economy sector. In the context of globalization and the widening gap between real and financial capital, which affect the firmness and stability of the financial system, the process of generating fictitious capital, especially in times of instability and crisis, speculative capital is given priority and derivative financial instruments are a form of its realization. The rapid development of derivative financial instruments, within the limits of the global economy, has changed, apart from the ratio of speculative to real capital, also basic perceptions of the traditional phases of society development, the division of economic sectors and types of capital, which serves them through financial markets. At the same time, the creation of derivative financial instruments provided a deeper goal – objectification of an abstract risk. This is what defined and defines the nature of global capital flows through these financial instruments and what distinguishes this class of financial derivatives in from commodity derivatives in. The article defines the place of speculative capital as a form of fictitious capital through the lens of highlighting the phases of development of society, the division of sectors of the economy and the types of capital that serves them.Derivative financial instruments have been proven to be a qualitatively new form of both fictitious capital and speculative capital, which is in circulation in the tertiary financial market and serves the needs of the tertiary and quaternary sectors of the economy in the post-industrial stage of world economic development. The origin and main characteristics of speculative capital have been identified. Keywords: financial market, financial capital, fictitious capital, speculative capital, derivative financial instruments.

Based on IFRS laws, British companies have started providing their reporting systems according to International Standards Requirements regarding disclosing their financial derivatives since January 2005. In 2013, Iran revised its Accounting Standard No. 15 to include the derivative instruments. The present study aims at investigating the effect of this revision on financial derivatives and instruments, and the effect of earning management on the relationship between the level of financial derivatives and instruments and risk-adjusted discount rates. From generalized least squares regression panel data, it was found that based on the first hypothesis, the companies which disclose their financial instruments based on No. 15 internal standard have a lower risk- adjusted discount rate, implying an increase in profit and a price rise in the markets. The findings also confirmed the second hypothesis, attesting to the effect of earning management on the relation-ship between financial derivatives and instruments disclosure and excess return. Findings of the research third hypothesis represent that there is a direct meaningful relationship between disclosure level of financial instruments and company value. So, it can be concluded that instruments` disclosures and financial derivatives can decrease risk-adjusted discount rate and increase companies` values in terms of standard number 15.

This paper presents a new dynamic approach to control and stabilize the global financial derivatives. Since 2007 the Global Financial Economy has been experiencing what is said to be the worst financial crisis since the Great Depression in the 1930’s. The Bank of International Settlements (BIS) in Switzerland has recently reported that global outstanding derivatives have reached 1.14 quadrillion dollars: $548 Trillion in listed credit derivatives plus $596 trillion in notional OTC derivatives. Although the financial derivatives are governed by the celebrated parabolic partial differential Black- Scholes formula, but it is not clear how derivatives are controlled and stabilized. This paper investigates equilibrium, stability and control of financial derivatives. The analysis is based on the discretization of Balck-Scholes formula to a system of linear ordinary differential equations. It is found that such financial derivatives experience a drift which hardly can be brought to equilibrium state. Controllability and observability conditions of financial systems are proposed. Moreover, stability of such derivatives is tested by the virtue of Liapunov methodology. It is figured out that financial system should satisfy the quadratic form which can be interpreted as a conservation condition of financial instruments. Furthermore, a financial state-feedback control system is proposed. Such analysis shows that the financial derivatives system needs to be injected with cash to maintain its stability. These results may explain the shortfall of li-quidity needed to substitute for the 1.14 quadrillion dollars bubble. Finally, examples and simulation results are demonstrated to verify the effectiveness of the proposed approach.

The purpose of the study is that in the financial market, in addition to the money market, there are markets for the purchase and sale of assets in future periods. However, the parties to such contracts have the right or obligation to sell or purchase a financial asset at a fixed price on a fixed date. Such contracts are called derivative financial instruments, since it is believed that the contract price is directly related to the change in the price of the underlying asset. Derivative financial instruments help not only to fix future prices, but also to insure against unfavorable exchange rate volatility. To fulfill the latter function, the country's economy must have a market of derivative financial instruments and a market of underlying assets.Methodology. The methodological basis of the research is the dialectical method of cognition. In the process of research, both general scientific methods (analysis, synthesis, deduction, classification, systematic approach) and special methodological techniques (accounting and tax accounting) are used.Originality / value of the research. In the conditions of instability of the world economy, the accounting of derivative financial instruments as a mechanism of crisis management and regulation in the country, stabilization of the efficiency of business portfolios of economic entities occupies an important place. The practical significance of this scientific article, designed to reflect the specifics of the organization of accounting for financial instruments in the financial risk management system of business owners in an unstable financial crisis, is considered to be quite high.Therefore, in this scientific article we will give a description of theoretical scientific and practical approaches to the peculiarities of accounting for financial instruments.Findings. The article reflects the methods of regulation of accounting for derivative financial instruments through the standards of IFRS 32 «Financial Instruments: provision of information», IFRS 7 «Financial instruments: disclosure of information», IFRS 9 «Financial Instruments». Based on the data, the essence of hedging will be reflected in the accounting and reporting system.

The scope and methods of attracting financial resources in different countries have specific features; however at the current stage of the global financial market development, a significant part of financial resources is attracted by issuing securities. The securities market in the Kyrgyz Republic emerged in the time of the privatization of state enterprises in different economic sectors. The first issuers appeared; they were joint-stock companies, investors and professional players of the securities market. It is known that dynamically developing economy is based on the development of the financial market of the country. The volume of the stock market shows not only its development at the moment, but also it is a good base to draw conclusions about all the economy in general. The stock market is often called a “mirror of the economy.” The analysis shows that unlike Russia, the Kyrgyz Republic has no experience in making transactions using financial derivatives on the domestic and foreign markets as well as in hedging price risks on the currency, oil or stock markets. The main reason for the lag is the lack of legislative framework for markets of derivative financial instruments.

Starting from the fact that clusters contribute to the competitiveness of industry sectors and the high standard of living in regions where clusters operate, the aim of this paper is to show the relationship between the stage of economic development and the state of cluster development at the level of national economies. Using the ANOVA statistical method the authors have accepted the hypothesis that the state of cluster development in national economies varies depending on the stage of economic development. In order to evaluate the state of cluster development in the country and the stage of economic development, the authors used the secondary data from the World Economic Forum (WEF), published in “The Global Competitiveness Report 2013–2014”. Although the stage of economic development is influenced by many economic and political factors, the authors assume that the stage of economic development predominantly depends on the decision and willingness of political and business leaders to lead the country to higher stages of economic development and sustainable economic growth. Their decision has an impact on cluster development in the country, and therefore influences the possibility of clusters to improve economic development and national competitiveness, especially in emerging markets and developing economies.

Financial management is one of the most core tasks of a social team and an important link related to the survival of enterprises and the economic development of the country. Therefore, financial management is regarded as a top priority from the national tax and financial system to enterprises and individuals. However, with the rapid development of social economy and the extremely active economic activities in China, especially the complicated capital flows and the rapid changes in the market, even if the financial system is upgraded many times, it is still difficult to meet the requirements of enterprises. In recent years, computer network technology has been more and more widely used in all aspects of social production and life. It can replace people to complete complex, tedious, repetitive, and consumptive work. Therefore, the research and development of financial accounting management system based on computer network technology have important production significance and social value. Firstly, this paper summarizes the development process and current situation of the financial management system, points out the difficulties existing in the current financial accounting management, and investigates the development and application status of computer network technology. Then, it studies the shortcomings of current financial work and the necessity and feasibility of applying computer technology to financial management. Finally, it analyzes the beneficial effects of computer network technology in financial management, designs the overall structure of the financial accounting management system based on computer network technology, studies the characteristics of each subsystem of the structure, points out the technical and institutional challenges faced by computer network technology, and gives corresponding suggestions. This paper is an applied research on the application of advanced computer network technology in financial accounting management, which helps the rapid development of China’s financial accounting management system and provides a combination idea for the application of computer network technology in other traditional industries.

The traditional literature on the role of intellectual property rights (IPR) in innovation highlights the strength of IPR protection in the context of the tradeoff between innovation and diffusion. More recent literature analyzes the role of diverse forms of IPR in promoting innovation and growth and delves into not only regular patents but also utility models (or petite patents) and trademarks. Using firm‐level IPR (patents, designs and trademarks) data from Korea, we further extend this new strand of literature to explore the role of designs at different stages of development. The data spans five decades and can be divided into three subperiods that represent different stages of economic development. We find that design‐intensive sectors tend to be more export oriented. Further, firms’ sales growth is significantly associated with the design intensity of firms. Such association is found only during the later stages of economic development in Korea. Taken together with earlier studies, our findings imply that different forms of IPR, in particular designs, matter differently for innovation and firm performance at different stages of development. Designs are not that important in the early stages of development when economic growth relies on the mass production of low‐cost goods by low‐wage workers. The importance of design rises with economic development at later stages when product differentiation becomes critical. A unique and smart appearance increases value in the eye of the customer value and, thus, could help firms’ sales performance.

In order to supervise and forewarn the sustainable operation ability of enterprises efficiently and accurately, this paper proposes an enterprise financial management and forecasting system based on SaaS model. First of all, in order to continue to effectively predict and analyze the enterprise finance, first analyze and extract the report data in the financial system. Then, by building a deep belief network model to predict the enterprise financial data, in order to reduce the cost of enterprises, the financial system designed in this paper chooses the cloud technology service framework based on SaaS model. Finally, in order to analyze the risk identification performance of the financial management and prediction system in this paper, the risk sample data of an enterprise’s financial system is selected for simulation test. The results show that the correct rate of risk identification of the financial management system designed in this paper is higher than other comparison systems, which speeds up the speed of risk identification of the financial information management system, and has certain practical application value.

A research question that has not been satisfactorily answered in the relevant literature is what are the reasons for low efficiency of EU-funded public support programs dedicated to increasing innovativeness of Polish enterprises. The aim of the study undertaken by the team of researchers at the Institute of Economics, Polish Academy of Sciences is to establish interrelationships between the current stage of development of the Polish economy and determinants of its innovative capacity in the context of absorption of EU structural funds. The first part of study sets the conceptual background in the area of stages of economic development. The conceptual study is complemented by the quantitative analysis of the current stage of development of the Polish economy. The second and the third chapters presents major exogenous barriers to the growth of innovativeness of the Polish economy, and endogenous obstacles to effective transition of the Polish economy. Another parts concerns the demand-side determinants of innovation processes during the transition between the investment-driven and innovation-driven stage of economic development. Next part presents the evolution of theories of innovation, scrutinizes the adaptation of analyzed firms to the conditions of the transitory stage of economic development. The final part of the book is devoted to the role of the science sector in the process of transition of the Polish economy to the innovation-driven stage of development. The study presents a number of recommendations for economic policy directed at increasing the pace of the innovation process.

The article discusses the stages of the formation of a national financial management system. In Kazakhstan, the beginning of corporatization and privatization on a large scale, the growth in the number of newly established private companies, the expansion of contacts with foreign partners, including in the area of investment operations, require urgent monitoring of modern mechanisms and methods of financial management, the complex process of managing financial resources of a company engaged in business. activities, although some elements of financial management were present at different stages of economic development, but in the full sense of this understanding tons in financial management was not implemented. According to the author of the article, the transition to market relations has led to the separation of financial management functions at the state level and financial relations to self-regulation within commercial organizations, which creates the official basis for the implementation of financial management. From the point of view of the author, financial methods and tools, the functioning of financial management available for the relationship, the process analyzed in literature and adaptation used in the practice of taking into account Kazakhstan, are not considered in the complex because of the overall result of managing the organizational staff of the system.

Introduction. Evaluation of systemic risk is very complicated, as it is difficult to accurately predict the extent of the links between various institutions, and the possible spread and scale of the country's systemic risk. In addition, the country's systemic crisis is affected by many factors, many elements of the financial system. Financial derivatives are one of many elements of financial system, and the market of financial derivatives is huge compared to other financial instruments. The impact of financial derivatives to economies of various countries has been widely studied, however, the research on their impact to countries‘ early systemic risk remains under-researched. For this reason, assessment of the impact of derivative financial instruments on the early systemic risk is very relevant.
 Aim and tasks. The purpose of the article is to assess the impact of financial derivatives on the country's early systemic risk in the Euro area region.
 Results. It is shown that correlation fluctuates between weak-strong level, when analyzing relationship between various factors of financial derivatives and early systemic risk in the Euro area. Results of linear regression analysis prove that the group of financial derivatives independent variables (interconnection, size, liquidity, complexity, stability, leverage) can be used to reliably estimate the dependent variable (early systemic risk). Logistic regression analysis also provides similar results to the linear regression analysis. Additionally, it is shown, that logistic regression is more suitable to analyze impact on early systemic risk. Analysis of impact of individual financial derivatives factors to early systemic risk demonstrate, that three financial derivatives factors – size, complexity, and leverage – may be the best predictors of an impending systemic crisis. Among these factors, the size factor has the largest impact on early systemic risk of the Euro area, and complexity factor shows improved statistical parameters, which indicates, that this parameter is more suitable to be used in early warning system models.
 Conclusions. The use of financial derivatives has strong impact on early systemic risk in the Euro area. The size factor of financial derivatives indicates the highest probability of an impending systemic crisis. Nevertheless, complexity factor of financial derivatives is the only statistically significant factor, that has an impact on early systemic risk. The results suggest that the inclusion of these factors in the systemic risk assessment models, which are developed by researchers, could increase the accuracy of the models. It is noted, that country’s systemic risk may not necessarily arise in financial derivatives, because there are many different financial products in the financial system. As a result, other financial instruments could also be the subject to further research by scientists. The inclusion of factors of various financial instruments could help to better identify the risks of impeding systemic crisis in systemic risk assessment models.

Using a panel of 113 countries over the period from 1990 to 2013, this paper provides new empirical evidence to the intensive debate of whether financial structure is relevant for economic growth. Specifically, we evaluate the role of political risk, development stage and their interactions with the structure of the financial system. We find that on average a more market-based financial system is associated with a higher level of economic growth. This impact varies with different levels of political risk and different stages of economic development. Specifically, the comparative development of equity markets compared with banks appear to promote more economic growth in countries with lower political risk and at a better stage of economic development. Moreover, banks are more important to economic growth in over-market-based financial systems, whilst equity markets are more sensitive to economic growth in over-bank-based financial systems. Our paper provides new insights into the real effects of the mixture of banks and markets on the economy.

Electric power is the basic industry of a modern country. The rapid development of the power industry has promoted economic development and social progress. With the establishment of the carbon neutrality target of carbon peak, China's power industry is also facing new situations and new challenges. This paper innovatively introduces the concept of allometric growth in biology, and uses the data of provincial electricity consumption and economic development from 1972 to 2017, to study the allometric growth relationship between electricity consumption and economics in China at multiple scales. Combined with the spatial autocorrelation analysis method, the temporal and spatial characteristics of allometric growth between electricity consumption and economic development were researched based on the analysis of spatial correlation of GDP electricity consumption intensity. The results show that: (1) The provincial GDP electricity consumption intensity shows an aggregate distribution, and the local aggregate pattern changed significantly from 1972 to 2017. (2) The High-High Cluster gradually disappeared, and the Low-Low Cluster moved southward, appearing in the middle and lower reaches of the Yangtze River. (3) The differential growth coefficient of electricity consumption and economic development increased initially and decreased from 1972 to 2017. (4) GDP would increase by 7.4%, 20.1%, and 15.6% in the simulation of electricity consumption, increasing 10% at the three stages of China's economic development. (5) The allometric growth coefficients of electricity consumption and economic development are very different in the three economic belts, eight economic zones, and provinces with different characteristics at the different stages of economic development. Formulating differentiated regulation policies for regional economic development and electricity consumption will be conducive to the coordinated development of electric power production and the national economy.

With the current changes in the trend of digital information technology, the development needs of the macroeconomic market within the new economic development stage and the international diversified economic wave, it is obvious that the financial management system of Chinese enterprises is no longer applicable.Then enterprise to promote intelligent finance, explore innovative enterprise financial management system for the urgent need. In view of the fact that, this article analyzes and discusses the problems belonging to the financial management system of Chinese enterprises at the existing stage, and creates a practicable path for the financial management system in a multi-dimensional and multi-level manner. The management of business operations and financial management is accompanied by a synchronised and optimized system for the management of communities, providing timely integration and dynamic quality enhancement.