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Investment capacity of the economy during the implementation of projects of public-private partnership

Journal: Investment Management and Financial Innovations (Vol.14, No. 3)

Publication Date:

Authors : ; ; ;

Page : 189-198

Keywords : infrastructure projects; investment capacity of the economy; market failure; multiplicative effect; public-private partnership; state failure;

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Abstract

The article considers the peculiarities of the mechanism of public-private partnership. An important problem of the research is to find an optimal ratio in the investment distribution when the arising positive externalities are maximized. In the critical literature review, the assumption was made that the balance between the market and state methods of regulation allows reaching the sustainable growth from the point of view of the use of resources. This hypothesis is developed in the analysis of the multiplicative effect through the index of GDP investment capacity. The research approach is based upon the study of the regression dependencies: multidimensional optimization is solved by the method of configurations with performing the iteration procedure. The obtained results show that the state contribution into the total investment potential of the projects of public-private partnership is traditionally low. The maximal investment capacity of the economy can be reached when maintaining the structure of investment distribution at the ratio 0.09/0.91 for the public and private sectors, respectively. The practical use of the optimization model allows to introduce the flexible mechanism of coordination of the terms of project financing.

Last modified: 2018-03-14 17:09:34