The economic measurement of convergence of institutional impact on the sustainability of development of domestic enterprises

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The economic measurement of convergence of institutional impact on the sustainability of development of domestic enterprises

We considered basic provisions of institutional theories in the context of transaction costs about the economic stability of business entity's activity efficiency. We highlighted the premises of establishment of the institutional environment, which exercise a determinative influence on the efficiency level of a business entity and its economic stability. We enumerated the provisions of the base and vector of transaction cost influences on the activity efficiency and possibilities for ensuring the economic stability of a business entity. We described a potential use of a public partnership for establishment of the economic stability of business efficiency.

Putting forward the problem. External factors are known to have a substantial influence on the economic stability level of the enterprises main efficiency indicators, which fact actualizes studies of architectonics and insights into influences of the national institutional environment. The lack of current interdisciplinary assimilatory researches on the certain economic issue is one of the key challenges of studying economic processes through institutional paradigms, in particular, low economic stability level in providing the effective functioning of enterprises and institutional theoretical and practical directives on a formation of the actual institutional environment. Institutional in luences are permanent and they require ongoing monitoring. Therewith the information received requires its fundamental processing to evaluate the potential for providing of economic stability of efficiency of an entity functioning. Failure of a precise de finition of institutional in luences, which cause a signi icant change in the ef iciency level of enterprises turns to be an important challenge for the modern economy.

The analysis of recent research. Concerns over the problem of efficiency in the social and economic light with the focus on the enterprise economic stability were raised by many scientists, in particular by О. A. Bondar, I. Yu. Gryshova, N. Yu. Podol'chak, and others. Therewith, institutionalism and institutional in luences including the ones over economic systems, which are in a permanent search of economic stability of efficiency of their functioning, were researched by T. I. Ye fimenko, V. M. Zapukhlyak, T. V. Kondrat'eva, K .S. Soloninka, and other researchers. Foreign experience in this subject is characterized by thorough works of such scientists as Kh. N. Payteliz, S. Shalteger, R. N. Stavins. Special aspects of institutional environment influence on the efficiency of enterprises activity and of keeping the stability of economic level of such functioning are still open for research. The possibilities for the economic stability of ef iciency of business entities subject to their integration into a public-private partnership require being defined.

Setting objectives. The paper aims to form the decomposition of the institutional environment, which takes into consideration theoretical and practical aspects of economic stability of enterprise efficiency.

Presenting the main material. Consideration of economic field as a totality of restrictive rules stipulates the research of insights into institutions influences on the efficiency level of economic a stability of business entities development. Taking into account axiomatic statements defined by institutionalism, it is possible to extend the range of their influence on the processes, which ensure the economic a stability of enterprise efficiency.

Transaction costs are not only considered as one of the main categories of institutionalism but also have an essential influence on the economic a stability of the business entity efficiency. In the context of economic stability of the entity efficiency the exchange process is a fundamental process, and the costs related to this process often define the efficiency level of the enterprise functioning.

A title-for-title exchange is also studied in the context of transaction costs except for the costs related to goods or services exchange. «The level of transaction costs...related to property rights protection, contracts conclusion and fulfillment, information search is a criterion for an efficiency of standards and rules set forth for a private sector» [1] . Therewith it is reasonable to update the institution in luences on the transaction costs to the extent of economic stability business entity efficiency (Table 1).

economic dimension cost

In the modern economic environment with prevailing market mechanisms, transaction costs are in a prominent position among the factors of institutional influence. As a result, the more detailed analysis of the transaction costs is required. Approaches to an analytical representation of the transaction costs differ in their elements. In particular, O. O. Kantsurov considers that transaction costs are to be determined through administrative costs, marketing costs, inancial costs, income tax costs and social welfare deductions. While Zh. M. Yushchak [2] considers that the elements of transaction costs are to be added with capital subscription costs, other operating and miscellaneous costs, and also with income deductions. Taking into account analytical potential of national inancial accounting and the matter of transaction costs, we consider that transaction costs may be analyzed to the full extent on the basis of administrative costs, marketing costs, inancial costs, capital and subscription costs, and other costs. Our view is that neither pro fit gained from the company's ordinary activity, nor any other operating costs are to be referred to transaction costs as these types of costs are different and closely correlated with the operating activity of the enterprise. The list of the specified components of transaction costs is analyzed on the basis of industrial enterprises (Table 2). The years of 2012-2016 are under review so that to abstract from considerable institutional influences, which took place at the end of 2016 and continue to in fluence the country economy.

Table 2. Analytical representation of transaction costs of main industrial enterprises

The findings of the study show that increase in transaction costs results in a decrease in net pro fit of the enterprise and in its unprofitability. During the majority of the periods under review, when the share of transaction costs increased with regards to total costs, the financial result was negative. Such positioning of an influence of transaction costs on the financial result cannot be accepted as axiomatic, but the analysis con irms the importance of their in luence on the establishment of economic a stability of enterprise efficiency.

Among other transaction costs, a number of other institutional in luences can be determined. Besides, the current status of the determined institutional in luences cannot be considered to the full extent capable of ensuring the long-term economic stability of efficiency of activity of a business entity. It specifies constant transformation of both institutional and economic environment for the enterprise operation. In the context of the specified area of the economic study, it is reasonable to point out that the nature of effect of institutional influences grouped in Table 1 directly depends on upon a number of further non-formal institutions:

- a mentality of economic agents;

- an economic traditions of the business running;

- the vector of business morality in religious teaching;

- national and cultural peculiarities of moral measuring of economic activity;

- confidence in the context of cooperation and business partnership [3-5].

«Failure to ful fill a contract or agreement results in tangible costs, which are in advance included into business plans by the heads. Therewith the most serious institutional influence appears - the erosion of confidence in contractors. ... business relations result in the establishment of business networks, which become a stable and relatively closed set of relations between permanent partners» [6-8]. Establishment of permanent partnership relations is an efficient tool aiming to ensure the economic stability of efficiency of a proper enterprise. Partnership being updated has altered into the category of a public - private partnership. Partnership relations differ from a public - private partnership in an activity of a regulatory body within their relationship [9-10].

Formation of such associations was caused by the desire of a private sector of the economy to adjust institutional influences on their economic efficiency. Cooperation within a public - private partnership is advantageous for both business entities and government authorities: entrepreneurs receive as a partner a government authority, represented by a proper department with government powers (levers of institutional influence) and powerful administrative resource while government authorities receive the additional possibility of government influence on business structures. Within such partnership certain problems occur and have negative in luence on the level of economic stability of efficiency of a business entity, namely:

- lack of legally speci fied interpretation of a term public - private partnership (a state - private partnership);

- inefficient use of government fund and assets due to lack of proper legal regulation of this procedure;

- complication of regulation of the intellectual property right within partnership relations;

- the disproportion f competency of individuals who cooperate as partners [11-12].

Regulation of these matters will ensure more precise interaction of the partnership members.

Productive activity of such partnership will provide grounds for a formation of the progressive institutional environment, which regulates economic policy of the country to ensure the economic stability of efficiency of business agents.

Conclusions. Institutional environment for the economic stability of efficiency of an enterprise is characterized by the implementation of standards and rules in the administrative and legal area and an increase in transaction costs of the process of interrelations between contractors. The Economic stability of efficiency of functioning of the organization is possible to subject to compliance with socially oriented institutions and formation of business relations based on con idence, morality and ensuring mutual bene fit. Considering formalized and non-formalized aspects of the institutional environment makes it possible to promote economic stability of enterprise efficiency. Re-formatting of relations between contractors in a way of creation of a public - private partnership (importance whereof was determined by head of icers of national government institutions) is a practical tool aiming to efficiently ensure economic stability level of an enterprise.

economic dimension cost

References

1.Bondar O. A. Methodical bases of formation of the branch theory of effective enterprise management : author's abstract dis. ... doctor of economics sciences : specialty 08.00.04 «Economy and management of enterprises» (by types of economic activity) / O. A. Bondar; Kyiv National University of Civil Engineering and Architecture. - Kyiv, 2013. - 46 p.

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