FINANCIAL AND INVESTMENT DETERMINANTS OF REGIONAL DEVELOPMENT IN THE FACE OF ECONOMIC UNCERTAINTY
Abstract. The research aims to evaluate the development trends of Ukrainian regions in conditions of COVID-19 spread under the impact of financial and investment determinants. In the article, it is made the profound examination of the impact the restrictive and stimulating tools of public policy at national and regional levels have on the current condition of regional economic systems, in particular in the context of such components as price stability, investment attraction, business climate improvement, lending, capital investment, transparency of budget revenue-forming taxes administration, and stability of public finance. These sectors are most sensitive to public policy measures, particularly in conditions of social turbulence.
The analysis of financial determinants of regional development in conditions of the corona crisis has contributed to outlining the following negative trends: substantial decline in investments in the economy of regions and a falling share of new investment projects are the most negative consequences that will essentially affect the paces of economic growth in the following periods; deteriorating business climate, falling volumes of loans provided to economic entities, and growing share of short-term loans have affected new investment decisions; failure to fulfill the planned rates of the local budgets’ main revenue-generating indicators (PIT, local taxes) has affected the volumes of revenues from local budgets, including the investment ones; decline in transfers to local budgets from the public one has affected the funding of regional development programs; the foreign capital outflow occurred not only because of the deteriorating business climate in the country but also the inclusive nature of the COVID-19 pandemics and psychological-emotional factors of impact on the investors’ behavior in conditions of uncertainty.
The economic, fiscal, and social impacts of COVID-19 are territorially differentiated. Its various risks are much caused by economic and spatial features of regional development. At the same time, the panic caused by the COVID-19 spread leading to making a range of irrational decisions by financial-economic entities at various governance levels is an essential reason for the defined problems’ aggravation. The substantial decline in investments in the economy of regions and a falling share of new investment projects are the most negative consequences that will essentially affect the paces of economic growth in the following periods.
Keywords: regional development, economic uncertainty, COVID-19, finance, investments, determinants.
JEL Classification O18, H71
Formulas: 0; fig.: 2; tabl.: 3; bibl.: 15.
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