Factors of Forming an Effective Mechanism of Investment Provision of an Enterprise
Journal: Quarterly Scientific Journal "Economic Herald of the Donbas" (Vol.80, No. 2)Publication Date: 2024-06-20
Authors : Shalenyi V. Benyk M.;
Page : 149-155
Keywords : investment security; capital investments; financial potential; investors; investment climate; factors affecting the enterprise's investment potential;
Abstract
The article is devoted to identifying and assessing factors that influence the process of forming an effective mechanism of investment provision for an enterprise. Five main complex aspects of the formation and use of the financial potential of investment activities of enterprises are identified: profitability of economic activity, its riskiness, investment attractiveness of projects, preferences of enterprise owners, and availability of external sources of financing. It is shown that some indicators can characterize each of the indicated factors. The system of external and internal factors that have the most significant influence on its formation is considered. Investment potential is defined as an organized set of available resources (financial, property, personnel, and production) and the possibility of enterprise development, which is achieved through the implementation of opportunities for mobilizing internal and external investment funds to achieve the strategic and tactical goals of the enterprise through the investment mechanism. Considering the combination of positive, negative, external, and internal factors, the main options for the formation of the enterprise's investment potential were systematized.
It was found that the war in Ukraine caused significant difficulties for enterprises with a stable need for investments for development. However, in war conditions, new challenges and opportunities for business also appear. Enterprises that can adapt to new situations, introduce innovations, apply risk management strategies, and seek new sources of financing can maintain their competitiveness even under challenging conditions. For foreign investors, adherence to some basic principles remains essential, including ensuring the optimal risk-return ratio, a favorable tax environment, political stability, and the possibility of repatriating profits.
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