Investment Incentives Research Articles

The Role of Ease of Doing Business in Attracting Foreign Direct Investment in the SADC Region

This study seeks to analyze the role of ease of doing business in attracting foreign direct investment in the SADC region. The main goal of the study is to present new findings to corroborate whether ease of doing business factors are a significant and positive stimulus for Foreign Direct Investment (FDI). The study also proves to the role of ease of doing business to boost foreign direct investment in the SADC Region to enhance economic growth amid indications that foreign direct investment (FDI) streams in the SADC Region are diminishing rather than other economic communities all through the world, regardless of SADC’s endeavours to encourage an empowering environment for FDI. The research also verifies some hindrances such as negative gamble discernments, a troublesome business environment, and pervasive corruption as key elements given for SADC’s inability to attract and keep up with FDI. The study used panel data and therefore applied a Pooled Ordinary Least Squares (OLS) regression or a fixed effects model. The results revealed that gross fixed capital formation, political stability, corruption and gross domestic product were statistically significant towards FDI inflows into the SADC region. The study recommended that the SADC region should develop responsible foreign capital regulation which offers incentives for localized investment and lower unemployment rate by producing jobs and real income that can be used to either fuel economic growth or be saved in financial institutions.

Visual interference – artistic possibilities of linear mixed arrangements

The aim of the author of the article is to investigate the possibility of using the phenomenon of visual interference in architecture. The research is experimental and serves to develop a module consisting of two layers, which will be multiplied and placed on a glass façade. The research can be used to develop an image processing method using interference. In the introduction to the article, various forms of interference in graphics composed of linear elements are discussed. Examples of flat, non-transparent projects in graphics and painting are cited. Then, a group of spatial images was presented in the form of installations or placed on two layers of glass. Research aimed at developing a graphic layout to be placed on a glass façade is presented. The article briefly describes the creation of a module – a graphic element that is used to develop more complex compositions that can be used in a glass façade. This is a step towards creating a compendium of knowledge about this phenomenon and existing solutions. The results of our research can be an inspiration for artists and architects, as well as an incentive for designers and investors to use them in architecture.

Barriers to development of smart cities: Lessons learned from an emerging economy

Smart city development is an urban strategy that harnesses technology and innovation to enhance residents’ well-being. Its objectives encompass boosting economic competitiveness and advancing sustainable growth (Organisation for Economic Co-operation and Development [OECD], 2019, 2020; Digitalization of Public Administration and Services Delivery Act, B.E. 2562 2019). In this research, a qualitative study was conducted to study the steps to becoming a smart city in Thailand as well as the challenges in the urgent development of smart cities. Ten individuals were interviewed using a purposive sampling method. Content analysis and NVivo software were used to analyze the data. The findings revealed that to become a smart city, the steps involve preparing infrastructure, running projects for two years, and seeking certification from the Digital Economy Promotion Agency (DEPA). Certification offers Board of Investment (BOI) incentives, making it appealing to urban areas. In addition, the path to becoming a smart city in Thailand involves careful planning, substantial investment, skills development, collaboration, and regulatory adjustments. Addressing these challenges can help urban areas harness the benefits of smart city technologies, improve the quality of life for residents, promote economic growth, and beyond.

АНАЛІЗ ВПЛИВУ ПОДАТКОВИХ ПЛАТЕЖІВ НА ФІНАНСОВИЙ СТАН АГРОБІЗНЕСУ

Existing problems in the Ukrainian economy are often related to the tax system, namely the existing tools for tax regulation of agribusiness activities. Taxation is an important component of the system of financial regulation of the development of agro-industrial production, one of the levers of influence on solving problems related to the social importance of agriculture. Gradually, the country is trying to change, in particular by revising the norms of the Tax Law. The article examines the financial condition and structure of agribusiness under the influence of tax payments. Tax aspects of state regulation of agribusiness are analyzed. The composition and nature of the influence of tax payments on the state of agribusiness is substantiated. It has been proven that the current tax mechanism is too loyal to some taxpayers, as a result of which the budget of Ukraine does not receive a large share of income in the form of tax revenues, and small agricultural producers are forced to "survive" every time in such a competitive environment. Also, the study showed that tax payments have a negative impact on the financial condition of the agricultural sector of Ukraine. High tax rates lead to: a decrease in the profit and profitability of agricultural enterprises; decrease in investments in the agricultural sector; increase in the debt burden of agricultural enterprises; decrease in the competitiveness of Ukrainian farmers on the world market. Attention is focused on the urgency of implementing European experience and stabilizing the general picture of the financial state of agribusiness. Experts in this area claim that high tax rates and complex tax rules create a significant burden for agricultural enterprises, which can negatively affect their profitability, investment activity and competitiveness. We come to the conclusion that reforms of the tax system of Ukraine are necessary to stimulate the development of the agricultural sector and improve its competitiveness. Reforms should include, first of all, lowering tax rates on agricultural products and services, then simplifying tax rules and procedures, introducing tax incentives for investments in the agricultural sector, ensuring access to preferential loans for agricultural enterprises.

АНАЛІЗ ДЕРЖАВНИХ СТИМУЛІВ ДЛЯ ЗАЛУЧЕННЯ ІНВЕСТИЦІЙ У ЦИФРОВУ ЕКОНОМІКУ

The article is devoted to the substantiation of the theoretical foundations and the development of practical recommendations regarding the study of the influence of state incentives on the attraction of investments in the digital economy. It was revealed that digital transformation requires a combination of infrastructure and investments. Given the definition of the concept of “incentive” as a reason or inducement that encourages parties to certain behavior or certain actions, currently in the legal context incentives are created through laws, regulations, financial subsidies or tax levers. It is noted that state incentives are used as tools to encourage desired behavior and achieve state policy goals. Systematized state incentives for attracting investments in the digital economy: state digitalization programs; withdrawal of digitalization investments from the tax base of companies; preferential tax rates and “tax holidays” (VAT, PnPP, personal income tax, EUV); preferential loans and grants; accelerated depreciation of fixed assets; exemption from payment of fees for infrastructure, real estate and land rent; innovative export insurance; public procurement of digital innovations. The analysis of state incentives for attracting investments in the digital economy of countries such as the USA, Great Britain, Luxembourg and Germany was carried out. For example, in the US – federal grant funding to support digital inclusion programs in states and territories. The UK encourages venture capital investment through schemes such as enterprise investment (EIS), investment in start-up enterprises (SEIS). Tax incentives for investments are widespread in Luxembourg. In Germany, the most common incentive is State programs aimed at influencing the investment behavior of businesses for the purpose of economic development. It has been determined that national digital competitiveness is the result of investment in education and the provision of the skills required by the labor market. According to the annual Aggregate Digital Economy and Society Index (DESI) for EU member states, Finland, Denmark, the Netherlands and Sweden are the most digitized, and the Top 10 in the IMD World Digital Competitiveness Ranking are occupied by such countries as: the USA, the Netherlands, Singapore, Denmark, Switzerland, Republic of Korea, Sweden, Finland, Taiwan (Chinese Taipei), Hong Kong SAR. Tools for stimulating investment activity and measures for the implementation of appropriate incentives for the digitalization of the economy in Ukraine are disclosed.

СУЧАСНИЙ РІВЕНЬ ДІДЖИТАЛІЗАЦІЇ БІЗНЕС-ПРОЦЕСІВ АГРОПІДПРИЄМСТВ

In the modern world, where technology is advancing rapidly, the agricultural sector is also undergoing its digital transformation. The development of digital initiatives in the agro-industrial sector not only opens up new opportunities for increasing productivity and efficiency but also presents new challenges. The integration of innovative technologies such as artificial intelligence, the Internet of Things, blockchain, and process automation is changing traditional approaches to agribusiness, offering state-of-the-art methods for data management, production process optimization, and market interaction. Based on the analysis of the current level of digitization of business processes in agricultural enterprises, it is argued that the implementation of innovative technologies contributes to increased operational efficiency, reduced production costs, and increased profitability. It is substantiated that despite significant challenges such as farmers' conservatism and limited internet coverage, active implementation of advanced technologies, including the Internet of Things and artificial intelligence, opens up new opportunities for farmers and contributes to the overall efficiency enhancement of installed equipment. At the same time, it is proven that to realize the full potential of digitization in the agricultural sector, state support is necessary through infrastructure development, legislative regulation, and financial incentives for investment in cutting-edge technologies, which will help reduce the digital divide between large and small agricultural enterprises and ensure a more resilient and productive agricultural sector. The development of digital initiatives in the agricultural sector aims to increase operational efficiency and create digital organizations, leading to lower production costs, increased profitability, and improved overall efficiency of installed equipment. Despite significant investments in IT solutions for agribusiness, challenges such as farmers' conservatism and limited internet coverage need to be overcome to realize the potential of digitization. The active implementation of advanced technologies, including the Internet of Things and artificial intelligence, opens up new opportunities for farmers worldwide, simultaneously requiring them to adapt to digital data management and strengthen cybersecurity.

Халықаралық қатынастарда экономикалық дипломатияны жүзеге асырудағы оффтейк мәселелері

In the modern world, economic diplomacy is becoming an increasingly important tool in the foreign policy of states. One of the methods of its implementation is offtake, that is, an agreement to purchase a certain volume of goods or services under pre-agreed conditions. This is a tool of economic diplomacy that can be successfully implemented in modern society to achieve development goals and strengthen economic relations. One of the main advantages of an off-take is the reduction of risks for both parties. This allows the manufacturer to find out the exact demand for their products and ensure stable production volumes, and the consumer – long-term supplies at a low price. This also helps to establish trust between the parties, which is of great importance for expanding economic ties. Offtake is also an effective tool for attracting investment. By guaranteeing the purchase of a product or service, companies can attract financial resources to expand production and improve the quality of their products. This, in turn, contributes to economic growth and development of the country as a whole. In modern society, off-take stands out as one of the effective means of developing economic diplomacy. This is especially true for developing countries that are seeking to diversify their economies and attract foreign investment. Offtake can be a powerful incentive for investors because it provides stability and predictability in the need for a product or service. This article explores the role of off-take in the context of economic diplomacy, as well as its impact on international relations and economic cooperation. The article examines examples of off-take agreements in various sectors such as energy, agriculture, trade and investment, and also analyzes their contribution to the development of economic relations between countries and corporations.

СКЛАДОВІ ОРГАНІЗАЦІЙНО-ЕКОНОМІЧНОГО МЕХАНІЗМУ РОЗВИТКУ ВНУТРІШНЬОГО ВОДНОГО ТРАНСПОРТУ УКРАЇНИ

he issue of the development of inland water transport of Ukraine is gaining new relevance in the context of globalization challenges and the need to adapt the transport system of Ukraine in the conditions of the war and its recovery after the war. Backlogs in infrastructure modernization, insufficient funding, bureaucratic barriers and the lack of a clear long-term strategy make it difficult to effectively use inland water transport, despite its great potential in solving environmental problems and increasing economic efficiency.The purpose of the study is to develop proposals for improving the organizational and economic mechanism for the development of inland water transport in Ukraine. The results of the research will contribute to Ukraine's integration into international transport networks and ensure the sustainable development of water transport.The integration of Ukrainian inland water transport into international networks is critical, as it ensures adaptation to global practices and investment attraction. Upgrading infrastructure and introducing incentives for investors are crucial for the rapid development and modernization of the industry. It is necessary to introduce innovations and the latest technologies to improve efficiency, safety and environmental sustainability.Organizational and economic elements of water transport are interconnected and interdependent, creating a system where changes in one aspect require adaptations in others. This requires flexible management to achieve strategic goals.An algorithm for assessing the impact of strategic initiatives has been developed, which adapts to changes and optimizes resources to maximize positive impact. The algorithm incorporates big data analytics and machine learning, ensuring the effec-tiveness of strategies in a dynamic environment. These findings emphasize the need for a comprehensive approach to renewal and innovation in inland waterway transport, aimed at sustainable development and effective integration into global logistics chains.The field of application of the research results covers public transport strategies, infrastructure project planning and sustainable development policies. The imple-mentation of the proposed changes will contribute to increasing the efficiency, safety and environmental friendliness of inland water transport in Ukraine. The findings highlight the need for an integrated approach to reforming the inland waterway transport sector, with an emphasis on innovation, modernization and international integration. This approach will allow Ukraine to use its great transport potential to improve the socio-economic development of the country and reduce the environmental burden.Keywords: inland water transport, organizational and economic mechanism, evaluation algorithm, efficiency, adaptation

“Controlled Competition”: How Governments can induce Long-Term Competition

This paper builds a model of dynamic tournaments under incomplete contract situations to analyze how the government, as a national development strategy, induces incentives or forms of competition between multiple companies (between state-owned enterprises (SOEs), between private-owned enterprises (POEs), or between SOEs and POEs) in the long-run. This paper can be considered as a model analysis of “controlled competition” under “State Capitalism”, in which the government participates in the market as an active player, such as in China, Singapore, and in a broad sense, in Japanese Industrial Policy in the past. In addition to clarifying the incentive mechanism embedded in this model, we also examine the problems and areas for improvement from the perspective of incentive design. In particular, in the long-term competition between two heterogeneous companies, it would be a beneficial policy for the government if the feedback effect could be mitigated by handicapping the winner and favoring the loser, thereby restoring the competitive pressure that had decreased. At the same time, as excessive competition-inhibiting discriminatory prizes (“Cronyism”) greatly impede investment incentives for both companies, these can be viewed as a "government failure", and thus the institution should be redesigned to correct such obstacles, thereby maintaining appropriate competitive pressures.

Resource Rent Taxation in Aquaculture: Does Choice of Tax Model Matter for Investment Incentives?

Resource Rent Taxation in Aquaculture: Does Choice of Tax Model Matter for Investment Incentives?

Promoting Investment Incentives by International Financial Institutions: The Case of Fostering Natural Gas Investments in Developing Countries

Promoting Investment Incentives by International Financial Institutions: The Case of Fostering Natural Gas Investments in Developing Countries

The Efficacy of Interest Subsidies as an Investment Incentive Instrument

Purpose: Since interest subsidies have always been a crucial part of investment policy in Türkiye, the study focused on the efficacy of interest subsidies as an investment incentive.
 Methodology: First, the interest and cash-flow sensitivity of the investment expenditure are explored before touching upon the literature on the interest and credit subsidy sensitivity of the investments without omitting the influential financing parameters. Then, financing parameters in sectoral balance sheets and the financing outlook of the Turkish companies are examined to infer which type of credit subsidy should be preferred, before bringing concrete observations from the recent capital formation trend.
 Findings: First, funding conditions, economic cycles and market frictions stemming from informational asymmetry influence the efficacy of the interest subsidies. Second, interest subsidies only become effective when economic and financial volatility surge, which implies a lesser effect than quasi-tax incentives. Third, monetary and interest subsidy authorities should coordinate. Finally, the credit guarantee mechanism is more powerful than interest subsidies to achieve policy goals since credit accession is a way bigger problem for Turkish companies.
 Originality: To my knowledge, this is the first article ever written specifically examining the efficacy of interest subsidies in Türkiye, although there were many studies focusing on investment incentives in general.

Indication-Based Pricing for Multi-Indication Drugs

Many pharmaceutical drugs have multiple indications, for which they offer a varying degree of benefit for patients. Yet, in the current U.S. pricing system, the price of the drug is the same regardless of the indication for which it is prescribed. This uniform pricing policy can deter the payer from providing coverage for low-value indications, if the price is high relative to the potential benefit for patients, which can reduce patients’ access to the drug. It can also deter the drug manufacturer from investing in obtaining U.S. Food and Drug Administration (FDA) approval for new indications, as the lack of flexibility in pricing can result in too low demand (and thus profits) to recoup fixed investment costs. Indication-based pricing has been proposed as a new pricing mechanism for multi-indication drugs allowing the price to differ according to the indication, to better align the price of the drug to its value. In this paper, we analyze the effect of indication-based pricing in comparison with uniform pricing on the drug manufacturer’s profit and investment incentives, the patient demand and utility, the payer’s coverage incentives, and the payer’s objective. Under uniform pricing, we consider both the cases when the price can versus cannot be adjusted upon introduction of a new indication. We find that the drug manufacturer earns higher profits under indication-based pricing than under uniform pricing. Moreover, indication-based pricing improves incentives for the manufacturer to invest in a new indication and for the payer to cover the drug. If the fixed investment cost is high, indication-based pricing also benefits patients and the payer’s objective. Otherwise, the patient demand, patient utility and payer’s objective may be lower under indication-based pricing. Hence, payers who value the patient utility should carefully consider the tradeoffs involved in implementing this pricing system and where the bottlenecks are under uniform pricing. This paper was accepted by Carri Chan, healthcare management. Supplemental Material: The online appendices are available at https://doi.org/10.1287/mnsc.2022.01721 .

The impact of China’s new Environmental Protection Law on corporate environmental investments

As an important lever for China’s green development strategy, whether the new Environmental Protection Law can effectively form investment incentives for enterprises has attracted much attention and is also an important topic that theoretical research urgently needs to explore. This paper utilizes corporate data from non-financial listed companies in Shanghai and Shenzhen A-shares from 2007 to 2018. By adopting a double-difference model, it explores the incentive role and internal mechanism of the new Environmental Protection Law (EPL), implemented in 2015, as an environmental regulation on the environmental protection investment of enterprises, taking the new EPL’s enactment as a quasi-natural experiment. The study revealed a noteworthy and positive impact on motivation, which remained consistent even after various robustness tests. Additionally, the impact of incentives varied depending on the level of competition within the industry, financial constraints, and ownership type of the enterprises. Investigating the mechanism, it has been discovered that the incentive effect advances the environmental investment of firms through diminishing agency costs, enriching the quality of environmental information disclosure, and facilitating government subsidies to enterprises. This study not only verifies, from the factual empirical level, that environmental regulation policies can promote corporate environmental investment but also provides important evidence to support to a certain extent that the implementation of the new EPL can promote enterprises’ environmental governance behaviors. This article reveals the microeconomic effects of the new Environmental Protection Law from the perspective of corporate behavior strategies, and the research conclusions have important reference significance for the construction of national legal systems and the deepening of green development strategies.

Податкові інструменти стимулювання інвестицій в Україні та світі

Introduction. The widespread use of investment tax incentives to attract private investment around the world, and especially in developing countries in the absence of sufficiently convincing evidence of their impact on the volume of investment is an important policy issue for national governments and the international community. Problem Statement. Despite the lack of convincing evidence of the effectiveness of investment tax incentives, Ukraine, like most other countries, does not abandon the practice of using them, which necessitates exploring ways (primarily improving the design features of the incentives and the reasons for the negative consequences of the use of similar incentives in the past) to reduce the risks of their introduction. The purpose of the article is to analyze investment stimulation tools in Ukraine, to determine the possible risks of their application, based on the results of theoretical research and the practice of using similar incentives in EU countries. The methods of comparative analysis, abstract logic, analogies and theoretical generalization are used. Results. Constructive elements of tax and non-tax investment incentives for industrial parks, large investment projects and certain types of economic activity introduced in Ukraine are characterized. A comparative analysis of them with similar incentives in the EU countries was carried out. The author draws conclusions about the risks of their use in Ukraine, which are caused by: rejection of expenditure-based investment tax incentives, such as investment tax allowance or investment tax credit, which are considered to be better than income-based incentives; lack of practice in Ukraine of assessing the effectiveness of the use of investment tax incentives for SEZs and TPRs that were applied in the past, one of the types of which is industrial parks; the use of tax holidays in most preferential regimes introduced in Ukraine – a temporary exemption from corporate income tax, which is considered a particularly poorly thought-out form of investment incentives; reservations about tax incentives for large investment projects, which can lead to abuses and distortions; uncertainty about the possibility of state financial support for investment projects in the period of post-war economic recovery.

Innovative development of Ukraine in the context of European integration processes....

The article emphasises the importance of European integration for Ukraine, which is positioned as a key step towards approximation to European standards, gaining access to new markets and stimulating economic development. The relevance of the topic is substantiated by the transformational potential of innovations in combination with European integration for the future of Ukraine. The purpose of this study is to analyse the current state of cooperation between Ukraine and the European Union in the innovation sphere and, on this basis, to propose strategies for creating favourable organisational and institutional conditions that would accelerate Ukraine’s integration into the European innovation space. The study uses general scientific methods, including systematic analysis, structural analysis, historical and logical method, scientific abstraction, analysis and synthesis, and systematic generalisation. The article analyses the innovation sector in Ukraine and identifies the challenges that hinder its development: insufficient funding and investment in innovation, lack of effective mechanisms to support start-ups, and an education system that does not give due priority to innovation. The positive impact of European integration on innovation development in Ukraine is highlighted. The authors propose directions for the development of the innovation sector in Ukraine, which focus on strengthening cooperation between business, science and government, developing infrastructure to support innovation and creating incentives for investment in innovation projects. The results of this study are of practical importance for the formation and implementation of a set of organisational and institutional measures that will accelerate the pace of Ukraine’s integration into the European Innovation Area

BEYOND REDLINING: LAW, PROPERTY VALUES, RACIAL INEQUITIES, AND LTSS

Abstract This presentation will provide background regarding the social construction of property values and the interactive role that public and private institutions have played in creating racial disparities in property values. I will discuss known and proposed mechanisms through which this form of structural racism affects access to long-term services and supports (LTSS) and implications for the health of older adults and their care partners, presenting a specific example from my own research, which found that assisted living communities are located in 30% of communities in America. However, among communities with the highest percent Black population in their county, 31% of those located in counties with a low gap in Black-White economic mobility had access to assisted living, while less than 15% of those located within a county with a high Black-White gap in economic mobility had such access. I will describe how policymakers can use law to address racial disparities in geographic access by developing policies that 1) provide financial incentives for private investors to develop assisted living and other forms of LTSS in neighborhoods that otherwise wouldn’t see development due to low property values; 2) prioritize the location of new buildings in historically marginalized communities; 3) implement anti-displacement measures; 4) incorporate community input and engagement; and 5) ensure accessibility and affordability. Finally, I will describe how policymakers may consider the various actors and institutions that shape the housing market and how they interact with each other to produce outcomes that may reinforce or challenge structural racism.

РОЛЬ ЗЕЛЕНИХ ОБЛІГАЦІЙ У ФІНАНСУВАННІ СТАЛОГО РОЗВИТКУ

Активне формування ринків зелених облігацій пов’язано з виконанням завдань кліматичного переходу відповідно до Цілей сталого розвитку ООН у частині досягнення умов кліматичної нейтральності. Ринок зелених облігацій може надати Україні доступ до глобальних фінансових ресурсів для цілей післявоєнної відбудови і структурної перебудови національної економіки на якісно новому технологічному рівні на принципах сталого розвитку.Визначено, що проблематику наукових досліджень ринків зелених облігацій зосереджено навколо питань оцінювання їх впливу на сталий розвиток, стандартизації зелених облігацій, оцінювання премії за ризик таких облігацій, впливу емісії зелених облігацій на розвиток фондових ринків, обґрунтувань передумов ефективного розвитку ринків зелених облігацій.Систематизовано види зелених облігацій за типом забезпечення активами емітента. Узагальнено рекомендації міжнародних організацій щодо розвитку каналів залучення приватного капіталу у фінансування проєктів сталого розвитку. Акцентовано увагу на проблемі стандартизації зелених облігацій відповідно до міжнародних принципів, а саме: цільове призначення облігацій, прозорість звітності емітента, наявність механізмів управління залученими коштами, оцінювання результатів проєкту. Встановлено, що впровадження таких стандартів полегшує надходження коштів інвесторів у цільові проєкти сталого спрямування і дозволяє контролювати цей процес.Визначено, що найбільш проблемними питаннями розвитку ринку зелених облігацій в Україні є їх стандартизація, запровадження стандартів фінансової і нефінансової звітності щодо розкриття кліматичної інформації, запровадження державних стимулів для емітентів зелених облігацій та інвесторів, розвиток інфраструктури фондового ринку і диверсифікація фінансових інструментів, посилення прав інвесторів, популяризація ідей сталого відновлення в суспільстві.

The effects of carbon inequality on economic growth: new evidence from MENA region.

This study emphasizes the impact of carbon inequality on the economic growth of Middle East-North African (MENA) economies from 1995 to 2019. By employing the panel cross-sectionally augmented autoregressive distributed lags method (Chudik and Pesaran 2015), we explored the effect of the carbon footprint of top-income classes on economic performance in both the short and long term. The empirical results assume that carbon inequality indicators boost economic growth in the short and long run. In other words, economic growth may be slowed when carbon inequality is reduced. Our study has important implications for climate policy in the MENA region. In this context, relying on a carbon tax can increase business costs and reduce investment incentives leading to a decline in growth. Governments should adopt a more comprehensive approach incorporating other policy instruments such as nudging techniques, financial incentives, and public awareness campaigns. As a result, wealthy people will be encouraged to promote sustainable choices and behaviors that guarantee the progressive transition to low-carbon activities without hurting economic growth.

A Comprehensive Analysis of Multi-Factor Scale in Understanding the Perception of Mutual Fund Investors in Equity Schemes

One of the most important factors that determine whether or not an economy can expand and thrive is the degree to which it provides incentives for investment in the sector. Certain specialized organizations are required to be involved to successfully mobilize the finances of the general public for the goal of achieving beneficial outcomes. Therefore, mutual funds are the best option for the average investor since they can provide a cost-effective way to participate in a professionally managed and diversified collection of assets. This makes them the ideal alternative for the normal investor.
 The purpose of this research is to investigate the many aspects of investor perception and investigate the significance of these aspects to finance professionals working in the sector of investment. A conceptual model of the flow of mutual funds is built, operationalized, and verified with the help of a sample size of 131 investors. The findings demonstrate that each of the five dimensions—namely, risk, return, fund features, fund manager, and fund group—plays a significant role in determining the perspectives that investors have on their decisions to invest in mutual funds. Methods of exploratory and confirmatory factor analysis were used to evaluate the dimensions.