Innovative Financial Instruments Research Articles

Identifying minibonds issued level’s determinants to empower companies’ funding managerial strategies

PurposeThis paper aims to explore the determinants of the level of minibonds issued by companies. In doing so, it discusses the importance of minibonds in providing a market-based funding source. In the empirical analysis, special attention is paid to the study of the recovery from the COVID-19 crisis.Design/methodology/approachThe analysis is carried out through an econometric approach, on the basis of a high-quality empirical dataset related to the Italian small- and medium-sized enterprises (SMEs). The reference period covers the recent pandemic. From a theoretical point of view, a regression model is implemented, including a multicollinearity analysis and an outlier detection procedure.FindingsThe results of the study indicate that factors such as leverage, cash flow, firm collaterals and seniority can explain the amount of minibonds issued. These findings provide valuable insights into the drivers of minibond issuance and highlight the potential benefits of minibonds as a funding option for Italian SMEs.Practical implicationsImportantly, results highlight relevant managerial implications at two levels. On one side, we carry on a managerial discussion about the worthiness of accessing the minibonds market; on the other side, we give insights on the managerial implications related to the features of the companies issuing minibonds.Originality/valueThe paper investigates an innovative financial instrument that has been introduced recently and has not yet been studied in depth. To the best of our knowledge, this is the first contribution assessing the main drivers for minibonds issuance level, which is a timely and relevant managerial research topic. In addition, this study also takes into account the impact of the COVID-19 pandemic on minibond issuance, making the analysis appropriate for explaining the current economic context.

The impact of green credit on environmental quality: empirical evidence from China.

As an innovative financial instrument, green credit is a new driving force for environmental governance. To study the impact of green credit on environmental quality, this paper uses the provincial panel data from 2007 to 2020 to construct a panel model for analysis based on the comprehensive environmental quality index. At the same time, it discusses the mechanism and regional heterogeneity of green credit affecting environmental quality. The results show that green credit significantly improves the overall quality of the environment, which has a significant effect on air quality and green quality but has no significant impact on water quality and soil quality. Green credit improves environmental quality by improving green technology innovation and promoting industrial structure upgrading. At the same time, there is obvious heterogeneity in the environmental effect of green credit. Among them, the environmental quality improvement effect of the eastern region and the carbon emission pilot area is more evident than that of the central and western regions and the non-carbon emission pilot area. This paper has important implications for promoting the development of green credit and giving full play to the environmental effects of green credit to achieve sustainable goals.

Green Banking Initiatives: Policy and Practices in Commercial Banks of Nepal

Environmental and social (E&S) risk management has grown in key aspects of sustainability in banks and other financial institutions these days. A socially inclusive, climate-friendly and green banking system is only possible with the effective management of E&S risk in their business transactions. This study assesses the present implementation status of sustainability within commercial banks in Nepal, by examining their adherence to the environment and social risk (ESRM) guidelines issued by Nepal Rastra Bank (NRB). Using a descriptive research design, the study utilizes ESRM reports published by NRB in 2078/79 and 2079/80. The study examines the present state of ESRM guideline implementation across three key aspects of policy formation, training and development activities for bank employees, and incorporation of environmental and social risks within the core strategies of commercial banks. The result found a satisfactory level of implementation of ESRM guidelines. The policy formulation and governance indicators are almost realized and other indicators have satisfactory and progressive levels of operation in the banks. Effective implementation of sustainable guidelines and initiatives will be accomplished innovative financial instruments that incentivize green investments and support climate-resilient practices can further expedite the transition to a sustainable banking landscape. Overall, this study offers valuable insights into the current state of ESRM in Nepal's commercial banks, shedding light on the progress that can pave the way for a more sustainable and green financial system in Nepal.

Pensions under Pressure: Unraveling the Crisis and Debating Reform in USA’s Aging Society

Abstract: This research paper critically examines the challenges facing the pension system in the United States amidst a rapidly aging society. As demographic shifts lead to an increasing proportion of the population entering retirement, the strain on pension funds intensifies. The paper delves into the intricate interplay of factors contributing to the crisis, encompassing demographic changes, economic challenges, and policy issues. Demographically, the rising life expectancy poses a significant strain on pension programs, necessitating a re-evaluation of their sustainability. Economic hurdles, including low interest rates and market volatility, further compound the issue by affecting pension fund investments. The regulatory framework and policy landscape are scrutinized to assess their efficacy in responding to the evolving needs of an aging society. This paper not only identifies the problems but engages in a comprehensive debate on potential reforms. From adjusting retirement ages to exploring innovative financial instruments, various options are considered to address the pressing challenges. The research concludes by emphasizing the urgency of finding sustainable solutions to alleviate the pressure on the pension system, ensuring the financial security of retirees in the face of an aging population. The insights presented contribute to the ongoing discourse on pension reform, seeking a balanced approach that safeguards the interests of both retirees and the stability of the pension system.

Sustainable supply chain financing models: Integrating banking for enhanced sustainability

Sustainable supply chain financing has emerged as a pivotal strategy in contemporary business paradigms, aiming to harmonize economic growth with environmental stewardship and social responsibility. This review delves into the integration of banking mechanisms within sustainable supply chain financing models to foster enhanced sustainability across diverse industries. In recent years, the concept of sustainability has gained momentum, prompting organizations to reevaluate their operational frameworks to mitigate environmental impacts and address societal concerns. Supply chain financing, a financial tool facilitating transactions among interconnected entities within the supply chain, plays a crucial role in advancing sustainability objectives. By integrating banking institutions into these models, businesses can leverage financial expertise, resources, and networks to bolster sustainable practices throughout the supply chain. This review explores various dimensions of sustainable supply chain financing models, highlighting the significance of banking integration. Firstly, it elucidates the evolving landscape of sustainability in supply chains, emphasizing the imperative for concerted efforts to reconcile profitability with environmental preservation and social welfare. Secondly, it examines the multifaceted benefits of integrating banking institutions into supply chain financing mechanisms, including access to capital, risk mitigation, and expertise in sustainable finance. Moreover, the review discusses the emergence of innovative financial instruments such as green bonds, sustainability-linked loans, and supply chain finance programs tailored to promote sustainability goals. These instruments not only provide financial incentives for sustainable initiatives but also foster transparency and accountability throughout the supply chain ecosystem. Furthermore, the review addresses challenges and opportunities associated with integrating banking into sustainable supply chain financing, including regulatory complexities, technological advancements, and stakeholder collaboration. It underscores the need for strategic partnerships between businesses, financial institutions, and regulatory bodies to navigate these challenges effectively and realize the full potential of sustainable supply chain financing. The integration of banking institutions into sustainable supply chain financing models presents a promising avenue for advancing sustainability agendas across industries. By harnessing financial innovation and collaboration, organizations can foster resilience, efficiency, and ethical conduct within their supply chains, contributing to a more sustainable and inclusive global economy.

Analysis of innovative financial instruments in modern Ukrainian scientific literature

Innovative financial instruments act as a driving force for economic development. In the modern economy, the role of innovative financial instruments has grown significantly. With the application of financial innovations, it is almost possible to obtain high profits, minimize costs, develop new markets, and create competitive products with a high degree of novelty. So, in the market economy, innovative financial instruments are an effective means of competitive struggle, as they lead to the creation of new needs, a reduction in the cost of products, an inflow of investments, and an increase in the image of the manufacturer of new products, to the attraction of new customers. This article aims to define the essence of innovative financial instruments, drawing on an analysis of existing definitions of the concept of 'financial innovation' in contemporary Ukrainian scientific literature. Building on the reviewed material, this article presents an analysis of the types of innovative financial instruments put forth by Ukrainian scientists. L. B. Kolinets offers a classification that includes innovations related to equity instruments and debt instruments. Another group of scientists, S. V. Radinsky and O. D. Dyachun, identify financing instruments, hedging instruments, and special financial services as innovative financial instruments. The article also references other types of innovative financial instruments explored in the works of contemporary Ukrainian scientists. We analyzed statistical data on the development of derivatives and fintech and implemented business projects in Ukraine with the help of the «Big Idea». The expediency of using innovative financial instruments has been determined. The main advantages of using innovative financial instruments are that they accelerate business development, expand access to capital, and support the development of new products and services. In conclusion, ways were suggested to contribute to developing innovative financial instruments. Keywords: financial instruments, financial innovations, derivatives, crowdfunding platforms, cryptocurrency, blockchain technologies, fintech, payment system.

Classification and presentation of equity in IFRS financial statements

Subject. This article examines the methodological basis for the classification and presentation of an organization's equity in financial statements prepared in accordance with IFRS. Objectives. The article aims to substantiate the approach to the classification and presentation of information on the equity of an organization, ensuring its relevance and faithfulness. Methods. For the study, we used a logical analysis. Results. Based on the analysis, the article confirms the prospects for the combined use of the two features of the classification of capital items proposed in the Exposure Draft IASB/ED/2023/5 by the International Accounting Standards Board (IASB). Conclusions. As innovative financial instruments emerge, new problems will arise with the classification of financial instruments that have characteristics of both capital and liabilities. In this regard, it is necessary to continue research in the direction of the evolution of approaches to the classification of capital.

ESG Performance and Enterprise Value in China: A Novel Approach via a Regulated Intermediary Model

ESG (environmental, social, and governance) performance increasingly influences enterprise valuation. While researchers debate about the precise nature of this influence, most assume a positive linear relationship. This study introduces a novel ESG responsibility performance metric utilizing a regulated intermediary model using representative data synthesized from leading ESG rating agencies in China. It investigates the pathways of this influence and examines the mediating effects of corporate reputation, stakeholder engagement, and regulatory compliance. The findings reveal an inverted U-shaped relationship between ESG performance and enterprise value, moderated significantly by financing constraints. These findings remain robust after accounting for potential endogeneity using instrumental variables. Heterogeneity analysis highlights that this inverted U-shaped relationship depends on the industry characteristics and ownership structures, particularly noticeable in non-polluting and non-state-owned enterprises. Moreover, enhanced ESG performance correlates with a reduced cost of equity financing, thereby augmenting enterprise value. Financial institutions might consider employing innovative financial instruments to diversify their enterprise financing channels and effectively bolster ESG-focused enterprises.

Energy Finance and Carbon Finance: Key Roles of the Financial Community in Addressing Climate Change

Climate change presents a formidable challenge to humanity, demanding urgent action from all sectors of society. The financial community, with its significant influence and resources, plays a crucial role in addressing this global crisis. This paper explores the roles of energy finance and carbon finance within the financial sector in the context of mitigating climate change. It examines the mechanisms through which financial institutions can contribute to the transition towards low-carbon economies, including investment strategies, risk management approaches, and the development of innovative financial instruments. Furthermore, it discusses the potential synergies between energy finance and carbon finance in facilitating the transition to a sustainable energy system and reducing greenhouse gas emissions. By leveraging their expertise and resources, financial institutions can become key enablers of climate action, fostering the necessary investments and incentives for the decarbonization of the global economy.

ENHANCING GLOBAL COMPETITIVENESS OF U.S. SMES THROUGH SUSTAINABLE FINANCE: A REVIEW AND FUTURE DIRECTIONS

Small and Medium Enterprises (SMEs) play a vital role in the economic fabric of the United States, contributing significantly to employment generation, innovation, and economic growth. Amidst increasing globalization and growing environmental concerns, the imperative for SMEs to enhance their global competitiveness while embracing sustainability has become paramount. Sustainable finance offers a promising avenue for achieving these dual objectives by integrating environmental, social, and governance (ESG) criteria into financial decision-making processes. This paper provides a comprehensive review of the literature on enhancing the global competitiveness of U.S. SMEs through sustainable finance, while also suggesting future directions for research and practice. The review highlights the growing importance of sustainability considerations in finance and the evolving landscape of sustainable finance instruments available to SMEs. It underscores the potential benefits of integrating sustainability into SME financing, including improved risk management, enhanced access to capital, increased market competitiveness, and positive environmental and social impacts. Furthermore, the review examines the challenges and barriers faced by SMEs in adopting sustainable finance practices, such as lack of awareness, limited access to expertise, and perceived costs. In proposing future directions, the paper emphasizes the need for targeted research to address the specific needs and constraints of SMEs in sustainable finance adoption. This includes exploring innovative financial instruments tailored to SMEs, enhancing financial literacy and awareness among SMEs, fostering collaboration between financial institutions, policymakers, and SMEs, and leveraging technology for scalable and cost-effective solutions. Ultimately, the paper advocates for a holistic approach that recognizes the interplay between financial, environmental, and social factors in driving SME competitiveness. By embracing sustainable finance, U.S. SMEs can not only enhance their global competitiveness but also contribute to broader societal and environmental goals, thereby fostering a more resilient and inclusive economy.
 Keywords: Small and Medium Enterprises (SMEs), Sustainable Finance, Global Competitiveness, Environmental, Social, Governance (ESG), Financial Inclusion, Innovation, Economic Growth.

The Effect of Interest Rate Risk on Financial Performance with the Mediating Variable of Banking Security Level (Study on Commercial Banks that Go Public in BEI)

Rapid internal and external development has been witnessed by the banking industry, particularly at the domestic level, where the usage of innovative financial instruments has grown dramatically. Banks mediate transactions between different economic activity, receive deposits, create money, and offer thorough banking services to individuals, organizations, and other banks. They also provide credit facilities. As a measure of a nation's spending and investing habits, the interest rate plays a significant role in conserving money and choosing how to spend it. Banking institutions are beginning to understand the significance of risk management in preparing for potential threats to their businesses. Banking executives in Indonesia must mitigate these risks by enhancing their institutions' bottom lines. The purpose of this research was to examine the relationship between interest rate risk and financial performance in Indonesian banking organizations, with the level of banking security serving as a moderation variable. This quantitative analysis employs a sample of 24 commercial banks that have listed on the IDX between 2019 and 2022 as its research population. The findings shown that Interest Rate Risk significantly impacts Banking Security Level, Financial Performance, and Financial Performance via Interest Rate Risk via Banking Security Level.

A conceptual framework for data-driven sustainable finance in green energy transition

As the world grapples with the urgent need for sustainable development, the transition towards green energy stands as a critical imperative. Financing this transition poses significant challenges, requiring innovative approaches that align financial objectives with environmental sustainability goals. This review presents a conceptual framework for leveraging data-driven techniques in sustainable finance to facilitate the transition towards green energy. The proposed framework integrates principles of sustainable finance with advanced data analytics to enhance decision-making processes across the financial ecosystem. At its core, the framework emphasizes the importance of harnessing vast datasets related to energy production, consumption, environmental impact, and financial performance. By leveraging machine learning algorithms and predictive modeling techniques, financial stakeholders can gain deeper insights into the risks and opportunities associated with green energy investments. Key components of the framework include data collection and aggregation, risk assessment, impact measurement, and investment optimization. Data sources range from traditional financial indicators to environmental metrics, social impact assessments, and geopolitical factors. Through comprehensive data analysis, financial institutions can assess the long-term viability and sustainability of green energy projects, while also evaluating potential social and environmental impacts. Risk assessment methodologies within the framework consider both financial risks, such as market volatility and regulatory uncertainty, and non-financial risks, such as climate change impacts and community resilience. By integrating these factors into risk models, investors can make more informed decisions that mitigate potential losses and maximize returns. Furthermore, impact measurement tools enable stakeholders to quantify the environmental and social benefits of green energy investments. By tracking metrics such as carbon emissions reduction, energy efficiency improvements, and job creation, investors can assess the contribution of their portfolios towards broader sustainability objectives. Finally, the framework incorporates investment optimization strategies that align financial goals with environmental objectives. Through portfolio diversification, asset allocation, and innovative financial instruments such as green bonds and impact investing funds, financial institutions can allocate capital more efficiently towards green energy projects. The conceptual framework presented herein offers a systematic approach to integrating data-driven methodologies into sustainable finance practices. By leveraging advanced analytics and comprehensive datasets, financial stakeholders can drive the transition towards green energy while simultaneously achieving financial returns and positive environmental outcomes.

International climate finance mechanisms: A review with focus on Africa

Climate change poses an unprecedented threat to the global environment, with far-reaching consequences for vulnerable regions, particularly in Africa. This paper provides a comprehensive review of international climate finance mechanisms, shedding light on their effectiveness in addressing climate-related challenges, with a specific focus on the African continent. As climate change continues to exacerbate existing vulnerabilities, understanding and optimizing the mechanisms through which financial support is channeled to affected regions becomes paramount. The paper explores a range of international climate finance mechanisms, including multilateral funds, bilateral agreements, and private sector initiatives. It assesses their strengths and weaknesses in terms of mobilizing resources, promoting sustainable development, and enhancing climate resilience. The analysis also delves into the evolving landscape of climate finance, considering the emerging role of innovative financial instruments and the potential for leveraging private sector investments to complement public funding. Focusing on Africa, the review examines the unique challenges faced by the continent, such as extreme weather events, water scarcity, and agricultural disruptions. It assesses the suitability and impact of existing climate finance mechanisms in addressing these challenges and supporting Africa's adaptation and mitigation efforts. The study also considers the effectiveness of capacity-building initiatives to enhance the ability of African nations to access and utilize climate finance resources efficiently. Furthermore, the paper highlights the need for enhanced transparency, accountability, and governance in the disbursement and utilization of climate finance in Africa. It emphasizes the importance of inclusive and participatory approaches that engage local communities and ensure that climate finance contributes to sustainable development goals while addressing the specific needs of the most vulnerable populations. This review provides a nuanced understanding of international climate finance mechanisms, offering insights into their application and impact in the context of Africa's unique climate challenges. By identifying opportunities for improvement and addressing existing gaps, the paper aims to contribute to the ongoing discourse on optimizing climate finance for a more resilient and sustainable future.

Fostering a livestock production sector transformation in India: an analysis of credit empowerment and innovations in value chain dynamics"

The dairy business holds significant importance in the Indian economy. This study examines the feasibility of employing value chains to mitigate financing risks and improve the creditworthiness of small and marginal farmers (SMF), with a specific emphasis on the Indian setting. This study thoroughly examines the obstacles encountered by smallholder and medium-scale farmers (SMFs) in obtaining financing. It explores alternate strategies for enhancing financial inclusivity for small-scale dairy producers. This paper suggests adopting and utilising novel financial instruments, such as the Farmers’ Choice Card Loan, Contract as Collateral, and a platform based on Blockchain technology. The aforementioned innovative approaches offer distinct avenues for tackling the financial requirements of dairy farmers in India, making a significant contribution to the advancement of sustainable agricultural practices and the promotion of economic self-sufficiency. This paper highlights the significance of fostering collaboration among financial institutions, dairy cooperatives, government bodies, and agricultural firms to deploy these innovative financial instruments effectively. Implementing these strategies can stimulate the expansion and advancement of the dairy sector, augmenting the socioeconomic circumstances of dairy farmers in India.

Innovative financial tools in the enterprise development system

This article explores using innovative financial instruments to support business growth. Starting with analyzing traditional financial instruments to support enterprises, the article considers innovative approaches. In particular, the advantages of using innovative financial instruments over traditional methods are investigated. In addition, the article analyzes the risks and challenges associated with the implementation of such innovative tools. The study reflects current trends and opportunities for businesses to use the latest financial tools to support their growth. The article discusses innovative financial instruments such as cryptocurrencies, crowdfunding and crowdlending, smart contracts, financial derivatives, distributed financial technologies (DeFi), and robotic investing (Robo-advisors). It also looks at how these new approaches can help raise capital for startups and small businesses with limited access to traditional funding sources. This article points out the prospects for the development of innovative financial instruments. The most important directions for possible further research in this area are also outlined. The advantages of embracing innovative financial instruments are not just apparent, they are transformative. These tools can expedite access to capital, slash administrative costs, and foster a more efficient use of resources. Take crowdfunding, for instance. It opens the doors to a vast pool of investors through online platforms, revolutionizing the financing process for small and medium-sized enterprises. This is just one example of how innovative financial instruments can pave the way for a brighter, more prosperous future. However, it's crucial to acknowledge the risks and challenges that come with the territory of innovative financial instruments. Market volatility, regulatory constraints, and the potential for financial pitfalls can pose significant hurdles to the successful utilization of these instruments. The absence of a legislative framework limited public awareness, high technological demands, and a dearth of historical data are all factors that need to be considered. Therefore, the research and analysis of innovative financial instruments is not just a task, but a responsibility for enterprises. It's a path that can lead to sustainable growth and enhanced competitiveness in the market, but one that must be trodden upon with caution and thorough understanding. Keywords: Financial instruments, blockchain, innovation, investment, financing, capital, credit, enterprises.

Combatting the financing of terrorism in conflict (war)conditions

The scientific article analyses modern terrorist threats in the territory of Ukraine, associated with the active use of financial assets, the latest technologies and innovative financial instruments, in particular cryptocurrencies. The positive experience of legislative initiatives and advanced practices of several foreign countries in combatting the legalisation of funds by illegal means and the financing of terrorism is highlighted. The problems of implementation of state policy in this sphere are revealed. Based on this, ways of improving the system of fighting terrorism in Ukraine on the international and national levels have been determined. It was concluded that the basis of the state policy in the field of combatting terrorism during the period of martial law and in the post-war period in Ukraine should be the development of the Strategy for Combatting Terrorism in Ukraine, which should take into account both the best world practices and the modern realities of waging war in the conditions of supporting terrorism with financial infusions.

Financial Sukuk: Concept, Legal Principles, and Types

Sukuk, often referred to as Islamic bonds, represent a unique and innovative financial instrument within the realm of Islamic finance. Originating from the principles of Shariah law, Sukuk offer a distinct alternative to conventional bonds by adhering to Islamic principles that prohibit the payment or receipt of interest (Riba). Instead of interest-bearing debt, Sukuk are structured as investment certificates, granting investors a share in the ownership of tangible assets or services. This adherence to Shariah principles ensures that Sukuk are compatible with Islamic ethical and legal standards, attracting a diverse range of investors seeking financial instruments aligned with their religious beliefs. As Sukuk continue to gain prominence in global financial markets, they contribute to the development of more inclusive and diverse investment options, catering to both Islamic and non-Islamic investors alike. This research paper presents a thorough literature review of Sukuk in the Islamic economy and showcases their definition, typologies and other aspects. Sukuk, often referred to as Islamic bonds, play a significant role in the Islamic economy. These financial instruments comply with Islamic law (Shariah) principles, which prohibit the payment or receipt of interest (Riba) and promote risk-sharing and asset backing. Sukuk provide an alternative means for raising capital that aligns with Islamic finance principles. The study herein is of significance for researcher as well as postgraduate researchers in the areas of Islamic banking, economy studies and accounting.

ИННОВАЦИОННЫЕ СТРАТЕГИИ ФИНАНСИРОВАНИЯ ГОЛУБОЙ ЭКОНОМИКИ: ГОЛУБЫЕ ОБЛИГАЦИИ

The blue economy is a relatively new concept, despite the fact that humans have used the ocean for economic gain for hundreds of years. Innovative financial instruments are based on the principles of sustainable development and bring new financial logic. The blue finance guidelines are based on SDG 6, SDG 7, SDG 9, SDG 12, SDG 14, SDG 15. Investment projects that meet the requirements of blue financing and blue Economies are well-suited for bond financing, as many require large amounts of initial capital with long-term and stable returns over time. Blue bonds are a targeted instrument to provide capital for blue economy- related projects and companies that plan to make a significant contribution to the achievement of the SDGs. The purpose of the study is to form criteria for assessing compliance with the investment principles of blue financing carried out through the issue of blue bonds. The author proposes a structure that reflects the relationship between the types of blue economy projects and the SDGs. This structure facilitates stakeholder access to the blue bond market.

Natural resources-financial innovation-carbon neutrality nexus: The role of policy robustness

This study sought to investigate the impact of a natural resources, financial innovation, and policy robustness on carbon neutrality of a nation. Cross-country data from 6 major Asian economies: China, Malaysia, India, Indonesia, Pakistan, and Japan, from 2010 to 2020, were drawn for the analysis. This study employed the Westerlund panel cointegration approach to examine the long term relationship among the variables. Three models were developed and analyzed keeping CO2 emissions, natural resources, and financial innovation as dependent variables. Our findings of model-1 revealed that abundant natural resources and increase financial innovation are linked to lower carbon emissions. Policy robustness plays a significant role in reducing carbon emissions, highlighting the importance of strong environmental policies for sustainable development. However, economic growth is associated with higher carbon emissions, suggesting the need to manage growth sustainably. As economies expand, the consumption of natural resources also increases, indicating the necessity for strategies to decouple economic growth from resource use. In the model-2, GDP positively influences the exploitation of natural resources, emphasizing the need for sustainable practices. In the model-3, financial innovation is positively related to carbon emissions, indicating the potential for innovative financial instruments in emissions mitigation. Conversely, a negative relationship between natural resources and financial innovation suggest the importance of sustainable financial practices. This study stresses the complexity of factors influencing environmental sustainability and calls for comprehensive research. It underscores the significance of combining economic development with sustainable resource use, innovative financial practices, and robust policy frameworks to foster environmental sustainability in the Asian context.

ІНСТРУМЕНТИ ФІНАНСОВОГО ЗАБЕЗПЕЧЕННЯ ІННОВАЦІЙНОЇ ВІДБУДОВИ ЕКОНОМІКИ КРАЇНИ

The relevance of the study lies in the need to develop and improve effective financial instruments for the innovative reconstruction of the country's economy. In the current conditions of rapid technological changes and global competition, the effective implementation of innovations becomes a key factor in sustainable economic development. One of the main obstacles to innovation development is limited financial resources. The research is aimed at identifying effective mechanisms for attracting and allocating funding to support innovative initiatives. Investors often have limited interest in innovative projects due to their high risk. The research aims to develop mechanisms to incentivize investors to participate in innovative initiatives. Determining the optimal balance between public and private funding to support innovation, as well as developing partnership mechanisms between them, also encourages seeking solutions to these issues and developing effective financial strategies for innovation to achieve sustainable economic development in the country. The goal of the research is to study, analyze, and determine optimal financial instruments that contribute to stimulating and supporting innovative development in the economy of Ukraine. During the research, general scientific theoretical methods were used, including systemic analysis to disclose key research categories, abstract-logical method for formulating theoretical generalizations and conclusions about the essence of the synergistic effect and its assessment, and graphical method for illustrating theoretical and analytical material related to the main characteristics of the synergistic effect in innovative clusters. The research included an analysis of various instruments used to provide financial support for the innovative sector of the economy. The primary focus was on mechanisms that determine the success of the country's innovative development. The analysis allowed assessing the effectiveness of different financial instruments and their impact on economic progress. It identified mechanisms that contribute to the growth of innovative potential and those that may be less successful. Key issues and challenges facing the financial system in implementing innovative projects were also identified. Their potential impacts on overall economic development were revealed, and directions for further research were determined. The article serves as a crucial tool for increasing understanding, developing strategic approaches, and promoting innovative reconstruction of the country's economy. It can be valuable for scholars and professionals studying or working in the fields of economics, finance, and innovation, providing them with knowledge and tools for further research and professional development. Further investigation into specific financial instruments, such as grants and financing, considering the impact of the political and social environment on the effectiveness of innovative financial instruments, can enrich understanding and help contextualize decisionmaking. Analyzing the interaction between innovative financial instruments and other areas, such as education, science, and entrepreneurship, may reveal additional opportunities for creating synergy.