Economic instability vs economic growth of territories: financial determinants and behavioral effects

Анотація

The functioning of the country’s economy during the coronavirus crisis requires in-depth study of financial determinants of impact on socio-economic development of regions, including: price stability, attracting investment and improving the business climate, lending and capital investment, transparency of budget administration, sustainability of public finances. The purpose of the study aims to evaluate the trends and features of economic development of Ukrainian regions in terms of financial determinants of sustainable growth of regions, taking into account behavioral effects. The following methods were used for the study: abstract-logical, comparative analysis, graphical visualization, statistical. Analysis of the financial determinants of regional development in the context of the coronavirus crisis has identified the following negative tendencies: significant reduction of capital investments in the regional economy, reduction of the share of new investment projects; deterioration of the business climate and reduction of lending to businesses; non-fulfilled plans of the main budget-forming indicators of local budgets (PIT, local taxes) was reflected in the volume of expenditures from local budgets, including investment; reduction of transfers to local budgets from the state had a negative impact on the financing of regional development programs; the outflow of foreign capital occurred not only due to the deteriorating business climate in the country, but also due to the pervasive nature of the COVID-19 pandemic and psychological and emotional factors influencing investor behavior in conditions of uncertainty about the nature and duration of the coronary crisis. The fact that, the impact of the COVID-19 crisis is territorially differentiated and its various risks are largely based on economic and spatial features of regional development, needs to be taken into account. As revealed, the most vulnerable are the regions that border territorially with EU countries and whose residents are focused on employment abroad; regions with the lowest indicators of socio-economic development and regions that are characterized by a high level of concentration of economic activity, in particular cities. Further research is focused on the introduction of incentive tools to influence the current condition of regional economic systems, taking into account the behavior of economic entities.

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