Crisis condition of Ukrainian economy led to stopping of its investment activity. Increasing the rate of inflation led to reduction of the investment processes. Economic entities kept inflation expectations, they stopped long-term investments. Tax pressure, increasing in these recent days, doesn’t give an opportunity of accumulating resources to potential investors for executing a real investment projects. Government programs are not performed, position of stock market is critical.
The significant decrease in household income does not allow the creation of savings, does not contribute to its investment activity. Unfavorable investment climate hinders the process of privatization, does not contribute to intensifying of investment activity. It is necessary to change external environment of Ukrainian economy for changing a situation to better. Scientific studies of particular aspects of investment activity in Ukraine are limited to theoretical generalizations and definitions, but practical development is almost non-existent. Lack of a scientific research problem, in general, need to develop practical recommendations to enhance investment in the economy of Ukraine determine the relevance of research topic.
In the current context of economic processes in Ukraine investment is a category that is most often used in the economy both at the macroeconomic as well as at the macroeconomic level. In modern literature there are many definitions of the term, but are often offered in the interpretation of them is the investment are not clearly or too narrowly, focusing only on certain essential aspects of concepts. In such circumstances it is necessary to define the essence of economic categories «investment».
According to the Law of Ukraine «On investment activity», are all types of investment property and intellectual values that fall within the objects of entrepreneurial and other activities as a result of which the profit (income) or social benefit is achieved.
This definition is responsible of international approach to the presentation of the investment process as the investment of resources (wealth, property and intellectual property) in order to profit in the future. Inaccurate is the implementation of investments in order to obtain social benefits. This effect can be achieved not by direct investment in business and, through increased income from investments and related income to the state budget, which is used to fund social programs.
The values and property rights are the objects of investment activity. The main source of investment is the national income, which is formed by the accumulation fund, which, in turn, conventionally divided into the recovery fund and the fund renewal. Through these sources are funding gross and net (in their composition) investment funds.
Gross resources are directed to the replacement (new construction, renovation and enlargement, technical re-equipment). The source of net investment is the fund replacement, at the expense of which form new productive assets. They are smaller than the gross value at the funds that are sent from the fund reimbursement in the form of depreciation allowances.
According to Muzichenko A.S., since the notion of reforming the economy of investments included in the economic literature in Eastern Europe, including CIS countries, which could be attributed to reform their economies. Previously, the notion of investments treated as a set of costs that are realized in the form of long-term investments in the sector of the economy (productive assets), which is identified with the notion of investment «capital». Muzichenko provides that the term «capital» is much narrower than the «investment». It should be borne in mind that investment capital can be carried out not only in monetary terms but also in the form of movable and immovable property, various financial instruments (securities), immaterial assets. In terms of finance, investment - this type of asset (fund) that invested in the business for profit, but in terms of economy, investment - is the establishment, expansion and technical upgrading of the core and working capital.
Udalih O.O. explains the importance of investment capital in all its forms, attributed to the objects of industrial and non-appointment in order to ensure an increase in the future, as well as non-economic effects of social and environmental. The increase in capital it should be sufficient to compensate the investor out of the use of these funds for consumption in the current period, his remuneration for the risk and losses from inflation in the future period.
According to the opinion Mayorova T.V., Ukrainian scientists is little attention paid to the internal nature of investment, a basic definition of the categories derived from foreign sources, where is the common interpretation of investment as a set of benefits and values that have invested in the business for profit (social effects) in the future. The most clearly identified the essential characteristics of investments and their ambivalence at J.M. Keynes: on the one hand, he sees in them the value of accumulated income to the accumulation and resources, that is, a potential investment demand. On the other hand investments are in the form of investments (costs) that determine the growth of the value of fixed assets, which is sold as a supply and demand. Under the investment demand to understand the demand of entrepreneurs for the benefit of the re-establishment of waste of capital and real capital gains. Factors that determine the demand for investment are as follows:
The cost of the acquisition, operation and maintenance of equipment. If these costs are rising, the expected rate of net profit from the proposed investment project will decline, and vice versa.
The level of taxation of investors. Increased taxes on investment leads to lower investment returns.
Technological change. Development and introduction of more productive equipment leads to an increase in the expected rate of net profit.
Supply major capital. Share capital affects the expected rate of net profit from additional investment of each industry. If each sector is well provided with facilities and stocks of finished products, the investment in this sector will be constrained or unavailable, while the expected rate of net profit from the increase in investment will be low.
Waiting. The task of each project is an expectation of profit. Share capital is in the long-term use (10 - 20 years), because the profitability of each investment depends on forecasts of future implementation and future profitability of products, which are produced by core capital.
It is necessary to clarify that master’s work is not end now, so the whole text you will be able to receive after January 2010.