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Firms-Daughters and Firms-Daughters-in-Law in the Context of Threats for Market Transparency

Journal: Herald of the Economic Sciences of Ukraine (Vol.46, No. 1)

Publication Date:

Authors : ;

Page : 24-31

Keywords : exterior and foreign sectors of the economy; daughter firm; daughter-in-law firm; economy of co-optation; market unity and transparency; energy market; REMIT;

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Abstract

The article is devoted to the study of the peculiarities of functioning of two sectors of the economy: exterior (as a set of business units belonging to Ukrainian parent companies, but operating in the territory of other countries) and foreign (as a set of business units operating in the Ukrainian territory, but belonging to parent companies of other countries). The need for this study arises in the context of the requirements for ensuring the integrity and transparency of the market (in particular, the energy market) in the context of the spread of the practice of applying co-optation economy techniques. Based on the generalization of the essential characteristics of the exterior and foreign sectors, original terms are proposed for business units inherent in these sectors: daughter firm and daughter-in-law firm. Due to this, possible threats to the market`s transparency caused by the influence of subsidiaries and daughter-in-law firms are considered, in particular against the background of the use of co-optation economy techniques. It has been determined that the main motives for the modern spread of the practice of introducing daughter-in-law firms into a certain national economy are the hunting for technologies, information, overcoming barriers to market access, as well as obtaining certain subsidies that violate the conditions of fair competition in the market. This necessitates precautionary measures at the legislative level. In particular, this concerns the current EU regulatory act on the integrity and transparency of the wholesale energy market (REMIT), which requires improvements that can prevent the risks of loss of market transparency and violation of integrity by business entities using co-optation economy techniques.

Last modified: 2024-11-10 23:52:01