Internal Investment Research Articles

The relationship between financial constraints and investment efficiency

AbstractThis study examines how financial constraints relate to firm‐level investment efficiency. Prior research theorizes that corporate borrowing by issue of risky debt induces suboptimal capital investment spending. We extend this research to examine whether firm‐level financial constraints and internal investment efficiency are significantly related. We measure firms’ degree of overall financial constraint following the procedure developed by Whited and Wu. Our results indicate that among highly financially constrained firms, overall financial constraints are positively associated with investment, and higher financial constraints are more likely to result in greater investment inefficiency. Furthermore, we find that this relationship is more prominent for companies with high free cash flow, high bankruptcy likelihood, and high growth potential. Our findings that financial constraints have significant influence on corporate investment efficiency should be of interest to company managers, investors, and regulators alike.

EXTERNAL INVESTMENTS AND THEIR ECONOMIC CONTROL IN THE MANAGEMENT OF ENTERPRISES OF TERRITORIAL COMMUNITIES

Purpose. The aim of the article is to define and substantiate the essence of external investments and various forms of their implementation for the economic development of enterprises of territorial communities. Methodology of research. The methodological basis of the research is the scientific works of foreign and domestic scientists on the issues of foreign investments and forms of their implementation. General scientific and specific methods were used to achieve the set goals, such as: dialectical method of scientific knowledge – to consider the essence of foreign investments; analysis and synthesis – to clarify the relationships between the elements of the mechanism; graphic – for a visual representation of the proposed measures; abstract and logical – for forming research conclusions and proposals. Findings. The essence of foreign investments is analysed. It has been established that investment attraction is one of the key factors in the management of enterprises of territorial communities. Key elements of foreign investments and significant aspects related to their essence are highlighted. Originality. A comprehensive understanding of the key aspects of attracting foreign investments and their impact on the management of enterprises of territorial communities has been offered. The study highlights the interaction of elements that determine the efficiency of the investment process and its role in creating a favourable economic environment. Practical value. The conclusions of the study have practical significance for local authorities and interested parties aimed at managing enterprises of territorial communities. In particular, the need for targeted investments in infrastructure, support of small and medium-sized businesses, regulation of human capital development, tourism development and innovation support is indicated. Integrating these elements into development strategies is a key to create an enabling environment for business development, contributing to economic stability and reducing inequality between them. Key words: investments, external investments, internal investments, risks, investment activity, enterprise management, economic control, territorial communities.

THE ESSENCE OF MODELS OF THE ECOSYSTEM APPROACH TO SUSTAINABLE DEVELOPMENT OF COMMERCIAL ENTERPRISES IN UKRAINE

The article highlights the importance of an ecosystem approach for the sustainable development of commercial enterprises in Ukraine, emphasizing the integration of economic, social, and environmental aspects. It examines models of business ecosystems, including platform, sustainable, industrial clusters, corporate, and regional innovation ecosystems, each with its own advantages and disadvantages. Special attention is given to the industrial cluster model, which enhances competitiveness, efficiently utilizes resources, and stimulates innovation. This model helps companies enter international markets, interact with government bodies, and attract both external and internal investments. Based on the research results, the prospects for implementing industrial clusters to develop export potential, improve the regulatory environment, create innovative ecosystems, access financing, stimulate growth, internalize operations, develop related industries, improve product quality, and strengthen the local supplier network are identified. Additionally, recommendations and implementation steps for this model are provided for businesses and heads of innovation departments.

Інвестиційний потенціал туристичної галузі України в системі стратегічного управління його розвитком

The article is devoted to the disclosure and substantiation of the theoretical foundations of the formation and development of the investment potential of the tourism industry of Ukraine, as well as the identifi-cation of factors of the investment strategy for attracting investments in this industry. It is substantiated that, depending on the sources of formation, the investment potential should be divided into internal and external, where the external investment potential is the possibility of investing in the development of enterprise by external investors who are interested in the financial stability and solvency of the enter-prise, whether the project will be able to make a profit, and if not, whether they will be able to return their invested funds; the internal investment potential is an opportunity to invest temporarily free funds to make a profit or achieve another useful effect in the future, both in the development of own produc-tion and in other projects (in this case, the company becomes an external investor). It is determined that, taking into account modern realities, the domestic tourism industry should mainly focus on attracting foreign investment, and the issues of their attraction to the tourism industry should be considered com-prehensively, taking into account the main factors of the investment strategy. It is substantiated that the structure of the motivational mechanism for attracting foreign investment includes regulatory, legal, economic and organizational factors, which are supplemented by the following: partial unification of the legislative framework with other countries; decentralization of executive power at the regional and local levels; creation of tourism clusters based on innovative projects; creation of special economic zones in the relevant territories with preferential conditions for investors; reduction of bureaucratic delays in the implementation of investment projects, especially innovative ones; cooperation between the State au-thorities and local self-government.

Operating characteristics analysis and capacity configuration optimization of wind-solar-hydrogen hybrid multi-energy complementary system

Wind and solar energy are the important renewable energy sources, while their inherent natures of random and intermittent also exert negative effect on the electrical grid connection. As one of multiple energy complementary route by adopting the electrolysis technology, the wind-solar-hydrogen hybrid system contributes to improving green power utilization and reducing its fluctuation. Therefore, the moving average method and the hybrid energy storage module are proposed, which can smooth the wind-solar power generation and enhance the system energy management. Moreover, the optimization of system capacity configuration and the sensitive analysis are implemented by the MATLAB program platform. The results indicate that the 10-min grid-connected volatility is reduced by 38.7% based on the smoothing strategy, and the internal investment return rate can reach 13.67% when the electricity price is 0.04 $/kWh. In addition, the annual coordinated power and cycle proportion of the hybrid energy storage module are 80.5% and 90%, respectively. The developed hybrid energy storage module can well meet the annual coordination requirements, and has lower levelized cost of electricity. This method provides reasonable reference for designing and optimizing the wind-solar-hydrogen complementary system.

ANALYSIS OF INVESTMENT PROCESSES, THEIR CHARACTERISTICS AND EMPLOYMENT IN THE AGRICULTURAL SECTOR OF THE ECONOMY OF TRANSCARPATHIA

Attention is focused on the importance of investment processes, which depend on the prospects of the country's development and the state of national production, the level of technical equipment of enterprises in the agrarian sector and economic well-being, the standard of living of the population. The peculiarities of investing in the agricultural sector, which are determined by the specifics of agricultural production, are considered. The main reasons for the slowdown of investment processes for business entities, which usually have low solvency and, accordingly, low investment attractiveness, have been determined. Keywords: investments, investment process, agricultural sector of Transcarpathia, employment in the region, external and internal investment in the agricultural sector of Transcarpathia, green market

STUDENTS’ ENGAGEMENT IN VIRTUAL CREATIVE WRITING: DEVELOPING A CREATIVE WRITING STYLE

Writing is not a stand-alone mental activity; it is inextricably linked to other forms of creative design, such as drawing and music composition. Writing is a highly sought-after skill in today's digital world. Creative writing is defined as the fluent exchange of concepts in an original manner through the construction of logical connections between them in written form based on the individual's schema. This article discusses a study that examined factors affecting student engagement as a lens through which to examine students' perceptions of their creative writing class participation. These interactions emphasize the complexities of student engagement and promote the accuracy of the instruments and metrics used to study it. Cognitive engagement is concerned with a student's internal investment in the learning process, which includes inner psychological characteristics or nonvisible characteristics that encourage effort in acquiring, comprehending, and mastering the knowledge or skills required for academic work. As a result, English lessons were held for 12 students from Flores' private junior high school. They completed a questionnaire that included quantitative and qualitative questions. Descriptive statistics are used to examine qualitative data conceptually and statistically. The participants' experiences reflected various aspects of the students' participation. According to the findings, creative writing activities can help students learn about behavior, emotion, and cognition in a poetry class. However, in a poetry class, emotional involvement prevailed and was followed by behavioral engagement. Nonetheless, pupils maintained a low level of cognitive engagement.

Industry-university-research cooperation and enterprise innovation performance: A review and a research agenda

Industry-university-research cooperation promotes the effective combination of production factors required for technological innovation. In this context, the size of the enterprise, the internal investment in R&D, the closeness of inter-enterprise cooperation, the training of quality personnel in universities and the introduction of professionals from society, and the planning of technology development and research directions by research institutions all have different degrees of influence on the innovation performance of enterprises at the enterprise level. Based on this, this paper defines the connotation of industry-university-research cooperation and innovation performance, and sorts out the influencing factors and effects of enterprise innovation performance under industry-university-research cooperation, so as to help enterprises improve their innovation capability and promote the construction of a scientific and effective industry-university-research cooperation innovation mechanism, thereby achieving sustainable development.

Assessing the cost-effectiveness of carbon neutrality for light-duty vehicle sector in China

China's progress in decarbonizing its transportation, particularly vehicle electrification, is notable. However, the economically effective pathways are underexplored. To find out how much cost is necessary for carbon neutrality for the light-duty vehicle (LDV) sector, this study examines twenty decarbonization pathways, combining the New Energy and Oil Consumption Credit model and the China-Fleet model. We find that the 2060 zero-greenhouse gas (GHG) emission goal for LDVs is achievable via electrification if the battery pack cost is under CNY483/kWh by 2050. However, an extra of CNY8.86 trillion internal subsidies is needed under pessimistic battery cost scenarios (CNY759/kWh in 2050) to eliminate 246 million tonnes of CO2-eq by 2050 ensuring over 80% market penetration of battery electric vehicles (BEVs) in 2050. Moreover, the promotion of fuel cell electric vehicles is synergy with BEVs to mitigate the carbon abatement difficulties, decreasing up to 34% of the maximum marginal abatement internal investment.

Building and testing a digital model for effective investment decisions to form strategies for development of economic entities

Subject. Sanction restrictions sharply decreased possibilities to attract external borrowings and substantiated the expediency of internal investments. This necessitated software tools enabling calculations and investment decisions. The developed a digital model of ISPI (Information System Portfolio Investor) will help make smart investment decisions, including at the government level. Objectives. The study aims to build a digital model to identify the most attractive investment areas at the regional, country, and cross-country level. Methods. The ISPI model is based on the Markowitz portfolio theory, the Profitability-Risk Model (PRM), and optimization methods. For our calculations, we used yields on Major and Sector Indices of the UK, India, China, USA, France, South Africa for 2014–2021, in one-month increments. Results. Using the developed ISPI model, we constructed scatter plots of leading stock market indices and identified the leading sectors of national economies of the studied countries and the most attractive investment areas. We solved the problem of finding a global optimum for the studied countries, differentiated the leading economic sectors by the level of investment risk, determined that an international portfolio is the most preferable for investment. Conclusions. Our ISPI model helps investors identify a region or country for smart investments. The model enables to determine industries in which investing is most justified within the nearest investment horizon. The model also helps identify the most appropriate financial instruments for investing in individual countries.

Does the pricing of intra-group investment deviate from the market rule? Evidence from domestic merger and acquisition transactions under common control in China

This study examines whether the pricing of intra-group investment deviates from market rules using data on domestic merger and acquisition (M&A) transactions under common control in China. It was found that M&A transactions under common control involve a lower premium than those without common control, which rely on market rules to set a price. This is because acquirers in M&A transactions under common control face a lower degree of information asymmetry than those in M&A transactions without common control. Moreover, this study explores the economic consequences of internal investment behavior from multiple angles. It was found that compared with acquirers in M&A transactions without common control, acquirers in M&A transactions under common control have lower performance in the market, finance, and innovation. This study addresses the research gap on the internal investments of groups and deepens our understanding of investment pricing in internal capital markets.

The Terprom® Digital Terrain System (DTS)

Developed specifically for tactical military aircraft operations, TERPROM® is the world leading Digital Terrain System, offering a range of capabilities that can provide both safety and tactical benefits to the aircraft. The system is an established and well-proven product that has been in production since 1991. To date it has been selected by fourteen Nations worldwide for use on numerous platforms. The number of military aircraft equipped with TERPROM® is now over 5000 and growing. TERPROM® provides the following functions: Terrain Referenced Navigation (TRN), Predictive Ground Collision Avoidance System (PGCAS), Advanced Terrain Avoidance Cueing (ATAC), Obstruction and Wires Warning and Cueing (OWWC), Database Terrain Following (DBTF), Air to Ground Ranging Functions, Terrain Awareness Display (TAD). At the core of the system is the Terrain Referenced Navigation (TRN) capability which navigates by combining aircraft navigation data (e.g. inertial and, or GPS) and radar altimeter measurements of height above ground level (AGI), with terrain heights alms from the stored map data, to produce a navigation solution referenced to the terrain map data. This navigation solution then allows the other TERPROM® functions to use the map data to provide their safety and tactical capabilities. Three variants of TERPROM® have been developed to satisfy the airborne platform market: - Fast Jet, Military Transport, Helicopter. TERPROM® is a living product that has and continues to receive significant internal investment to increase its capability, functionality and performance to support future opportunities. Current areas of development include: Use of higher resolution map data which will increase the performance of TERPROM® and offer enhanced capability to platforms flying nap of the earth, enhanced capability in urban areas and could also reduce any platform reliance on GPS. Integration with active forward looking sensors to provide additional information to the Navigation, Situational Awareness and Ranging functions and also to provide new capabilities such as real time mapping of unmapped terrain features and obstructions.

Do Share Repurchases Crowd Out Internal Investment in South Africa?

Researchers in developed countries have questioned whether share repurchase activity influences internal investment. The aim of this study was to investigate the relationship between share repurchases and internal investment (defined as capital expenditure, employment expenditure, and research and development) in South Africa, as little was known about this relationship in developing countries. A quantitative research methodology was followed, employing the data of South African listed companies during the 2002–2017 period. A significant negative relationship was noted between share repurchases and employment expenditure when considering all companies, while high-growth companies exhibited a significant negative relationship between share repurchases and capital expenditure. The negative relationships could indicate that companies increase share repurchases to the detriment of internal investment (especially employment). Alternatively, it may imply that share repurchase and internal investment decisions are determined simultaneously, with companies decreasing internal investment and increasing share repurchases in the absence of identifiable profitable projects (or increasing internal investment and decreasing share repurchases when growth opportunities are available). These findings could be useful to shareholders, corporate governance regulators and activists. Given the high unemployment and income inequality in South Africa, the results support a call for the improved regulation of share repurchases to ensure effective monitoring.

INVESTMENT PROSPECTS IN THE RECONSTRUCTION OF UKRAINE

INVESTMENT PROSPECTS IN THE RECONSTRUCTION OF UKRAINE

Does digital transformation restrain corporate financialization? Evidence from China

We investigate the effect of digital transformation on corporate financialization using a sample of Chinese listed firms from 2012-2021. We find that digital transformation exerts a negative impact on corporate financialization by decreasing financial investments while increasing real investments. More innovative activities and less operational uncertainty are two plausible channels that enable digital transformation to redeploy a greater number of resources from financial assets to real investments. We show that the effect of digital transformation on financialization is more prominent in companies with greater internal investment efficiency and external marketization levels. Our paper provides new insights on the effect of digital transformation on corporate financialization.

FACTORS FOR THE FORMATION OF FINANCIAL SECURITY FOR THE DEVELOPMENT OF DOMESTIC ENTERPRISES ON THE BASIS OF INNOVATION

Attention has been updated to the problems of forming financial support for the implementation of investment and innovation projects of enterprises, which aim to ensure their innovative development. Therefore, the purpose of the study is to identify the composition and analysis of the factors of the formation of financial support for the development of enterprises in Ukraine on an innovative basis. A typology of the factors of attracting financial support for investment and innovation goals was carried out in two directions: (1) internal resources and capabilities of economic entities, (2) external sources of accumulation of financial resources. Among the internal factors, the influence of such as the financial and economic condition, results and business activity of enterprises, availability of internal investment capital, innovative and technological activity of business entities, financial security and protection of intellectual property objects of innovatively active enterprises was analyzed. According to external factors, such as the development of the financial and credit system of the region, the activities of venture funds, business angels, the state of development of innovative infrastructure and the business environment were analyzed. The conditions that determine the specified factors of financial support for the innovative development of domestic enterprises are characterized, as well as their current state and the main problems that prevent the full involvement of financial and investment assets sufficient for the full-fledged conduct of innovative and technological activities by economic entities of Ukraine are identified. The scientific novelty of the research results lies in the further development of the methodological and applied principles of classification and typology of the factors of the formation of financial support for the activation of innovative activities of enterprises. The applied value of the research results lies in the possibility of identifying the available factors for the formation of financial and investment support for innovative and technological growth of business entities.

Accounting in digital business security: a transformational approach

Introduction. The article examines the features of accounting and reporting for digital assurance of business efficiency based on a modern approach. It has been proven that the goal of digitization is achieved under the conditions of digital transformation of existing and creation of new sectors of the economy, as well as restructuring of spheres of life into new, more efficient and modern ones. Accordingly, the reconstruction of the national economy and the development of innovative infrastructure require an appropriate level of capital investments, these can be both external and internal investments in the investment-attractive innovative infrastructure of the economy. The investment attraction process is preceded by the stage of presenting generalized accounting information about the prospects for changes in the business's economic potential, both for the short-term and the long-term perspective in a reporting format that cannot be provided by traditional public financial reporting. However, such information content contains n-dimensional actuarial reporting, which serves as the basis of value-oriented management and draws its content from the actuarial accounting system. The peculiarities of drawing up a 3D Balance Sheet (Statement of Financial Status) and a 3D Statement of Financial Results (Report on Total Income) based on business operations without drawing up accounting records are outlined. It has been proven that the traditional accounting paradigm has long since acquired a digital format of generalization of information through the prism of modern information technologies, then a new innovative step for its development in the context of mass digitization and the digital economy should be an innovative N-dimensional 5D interpretation of the spatial representation of generalized accounting information, which is expedient digital visa in the environment of Ukrainian software products "Master: Accounting", "Dilovod" or "ISpro". The purpose of the article is to investigate the specifics of the theoretical, methodological and practical principles of actuarial accounting for the information provision of real and potential investors, as well as other capital providers, through the prism of actuarial reporting, which eliminates agency contradictions between business owners (shareholders) and top management managers, which will contribute to the effective reconstruction of Ukraine's economy. The main research hypothesis is related to the assumption that actuarial accounting is able to provide interested parties with the most complete, systematic, verified and adequate to their requests Method (methodology). Includes general scientific methods - elements of the theory of logic; methods of theoretical generalization and abstract science; methods of comparison and grouping; classification method. The results. As a result of the conducted research, elements of scientific novelty were obtained, which are as follows: it is proposed to actively introduce an innovative type of accounting - actuarial, in the format of an n-dimensional actuarial accounting paradigm for domestic economic entities in the conditions of the digital economy. Which in terms of content meets the requirements of real and potential investors. The course, within the framework of such a strategy of successful post-war reconstruction and strategic business development, will contribute not only to an active movement in the direction of digitalization of society, but will also ensure an innovative transformation of the accounting system. Therefore, the practical significance of the conducted research lies in the development of recommendations for filling out financial statements, bypassing the stage of drawing up accounting records at domestic enterprises, which will contribute to the prompt and objective assessment of the impact of each business operation on changes in the structure of the Balance Sheet (Statement of Financial Position) and the Report on Financial results (Report on total income) in the actuarial accounting system.

Problems of attracting domestic investments in Ukraine during war

The article states what the internal and external investments are, examines the essence of internal investment and reveals its main components. Considered the importance of shifting emphasis from outward foreign investment to inward investment for achieving economic stability and growth in the face of fullscale invasion. At the same time, the relationship between internal and external investment is presented. The main problems of domestic investment at the time of a full-scale invasion and possible ways to solve them are studied. It is indicated what kind of economic policy should be built in the period of constant threats and instability. The positive and negative features of investing in the economy of Ukraine and the impact of the war are revealed. In this work, it is described why Ukraine can be considered an attractive country for investment. The material also describes the justification of the importance of the allocation of domestic investments as a necessary direction in the economy of Ukraine, the definition of the necessary concepts, the definition of interrelationships and causeand-effect problems in the matter of investments during a full-scale invasion. The article analyzes three types of domestic investments, namely state investments, investments at the expense of citizens' savings, and investments of large businesses. It is also revealed how each of these types can become key in the development of Ukraine in the economic sphere due to their involvement in the budget. It is also indicated what helped to save the situation in the country after the Russian full-scale invasion, namely, that Ukraine was set back 15 years in achieving its poverty reduction goals. The author describes how large and small businesses affect the economy of countries during wartime, as well as the problems that corporations face. The possibility of domestic investment through the country's citizens, the state budget and domestic Ukrainian business corporations is mentioned. The ways of attracting investment in the context of a full-scale invasion are indicated. The author describes how each type of domestic investment has suffered because of the invasion and how the war has affected each. The opportunities that the Ukrainian state can offer in response to inward investment are considered. The dynamics of the six-month dynamics of the investment climate is also presented. It is indicated how much the capital of direct investors in Ukraine decreased in the first half of 2022.

Modelling Outflow Remittances in the Digital Era: A Subnational Analysis of Russia

Relevance. The outflow of funds from the Russian economy, including remittances, can have a significant impact on the country's economic development. The influence of digital technologies and the heterogeneity of Russian regions further complicate the study of factors affecting remittance outflows. This study aims to address this research gap by examining the spatial effects of remittance outflows from Russia at the regional level within the context of digital transformation. Research Objective. The primary objective of this paper is to investigate whether spatial effects exist in the outflow of remittances from Russia at the regional level and how digitalization affects this phenomenon. By exploring spatial autocorrelation and fitting spatial models, we aim to understand the mutual influence and interdependence of regions in cross-border remittances. Data and Methods. The study utilizes open annual data from the Bank of Russia on cross-border remittances and data from the Federal State Statistics Service of the Russian Federation. The research methodology includes spatial autocorrelation estimation and the application of spatial models. Results. Our findings indicate that the digitalization of business transactions leads to a decline in cross-border remittances that do not involve payment systems. This finding primarily relates to the relatively low share of non-resident remittances within formal remittances. The results underscore the importance of considering spatial differentiation among regions in terms of remittance volume when formulating regional policies. Furthermore, the study reveals a shifting trend towards the emergence of major centers for outgoing transfers in the Far Eastern part of Russia and an increase in remittance volumes from border regions in the European part of Russia. Conclusions. The policy implications of this study highlight the need to encourage the participation of the population's savings in the domestic economy. This can be achieved through measures aimed at facilitating internal investment and financial inclusion.

On the theory of interaction of related economic systems

In the published article the process of interaction of several related economic systems, which, on the one hand, compete with each other for fixed assets, the necessary human capital and natural resources is examined. On the other hand, they complement and develop each other and form a single complex within which joint goods are produced, goods, services and financial resources are exchanged, etc. An economic-mathematical model of the dynamics of development and interaction of related economic systems is proposed, taking into account both their competition for resources and their cooperation in the production of joint benefits. This model is a system of non-linear differential equations, which are used to calculate indicators of the dynamics of development of related systems of the economy. The values of these indicators depend on the ratio of investment investments in the production of economic systems and their depreciation deductions for the restoration of resources and costs. The peculiarity of the presented model is that the production function of each economic system containing as arguments not only its own production factors, but also the resources of all other considered related economic entities. It is shown that by controlling the choice of the rates of accumulation of internal investments of economic systems, it is possible to obtain various options for their interaction. With a certain choice of accumulation rates, economic systems can operate independently of each other. Under other norms, some systems of the economy become independent and backbone, while the rest of the systems are subsidized.