Approaches to assessing the investment climate

Evaluation of the investment attractiveness of the country and the the region of a specific project is a critical aspect making any investment decision. The more complex the situation in the country or region the more the investors must rely on the results of a comprehensive evaluation of its investment climate. At the same time, investment climate assessments are an important element of information-analytical framework to the authorities and the various levels of government to take measures consistently improved the climate, making the conditions for capital investment in the country and its regions more favorable for different groups of investors.

Naryshkin N identifies four most typical approach to assessing the investment climate.

The first approach is mainly macroeconomic. It is based on estimates of a macroeconomic character (dynamics and the structure of the GDP volume and structure of industrial production, investment dynamics, the dynamics of the various categories of consumer spending, etc.)

The second approach is to assess the investment climate focuses on the factors and institutional plan, which is particularly important for assessing and predicting the investment climate of countries in transition (transitive) economies. This institutional factors of the investment climate: progress in the privatization process, the openness of markets, liberalization of foreign trade activities, the state legislative regulation of business and investment, conditions for the movement of goods, capital and labor, the degree of development of individual investment markets, including stock and cash, etc.. Among the factors institutional plan may include such components and the investment climate, as a general attitude of the authorities towards foreign investors, compliance governmental agencies, the level of efficiency when making decisions about business registration, access to information, the level of professionalism of the local administration, the effectiveness of law enforcement, business acumen and ethics of local entrepreneurs.

The third approach - resource (factor) - is based on an assessment of a set of factors that determine the resources for the investment process, and through them - the investment climate. This is a common feature of the economic potential of the country or region, natural resource and bioclimatic potential, the availability of free land for productive investment, the level of availability of human resources, science and technology (innovation) potential, infrastructure development and so on. This also includes such parameters as the volume of construction in progress, the degree of depreciation of fixed production assets and development of building bases, etc. An important component of the resource of the investment climate are the availability of budgetary resources, the availability of credit, the level of bank interest rates, further development of interbank cooperation, the proportion of long-term bank loans.

Finally, a fourth approach to assessing the investment climate requires an emphasis on the influence of factors of socio-political nature, it is also important to assess the enabling environment for the investment process in countries in transition (transitive) economies. This is the degree of public confidence in the central, regional and local authorities, the relationship of the federal center and the regional authorities, regions and municipalities, the level of social stability, state-ethnic relations, crime, public attitudes to domestic and the foreign entrepreneurs, the general working conditions for foreign experts and etc.

Other authors identify the three most typical approach to assessing the investment climate

First - narrowed. It is based on an assessment of: the dynamics of gross domestic product, national income and industrial production, the dynamics of national income distribution, the proportion of accumulation and consumption of the privatization process, state legislative regulation of investment activity, development of individual investment markets, including stock and the cash.

Second - advanced, factor. It is based on an evaluation of a set of factors affecting the investment climate.

Distinctive features of the multivariate approach to assessing the investment climate are: the opposite category of the investment climate for investment risk, the distinction between the concepts of investment and business climate, investment climate connection with investments in the real economy, the emphasis on the objective nature of the investment climate in the country, its independence from the will of individual investors, Contact the investment climate to investments in fixed assets, multilevel nature of this approach, communications investment climate with the investment potential and conditions of the investor, the priority of quality factors in the classification of homogeneous regions.

Summary measure of investment climate assessments may not serve as unambiguous criterion for the attractiveness of a business system investment. It is usually supplemented by information on the development of certain factors that have a direct impact on the state and dynamics of the investment climate. And when making decisions about equipment investment, each investor is entitled to rely on its own set of factors.

The third approach is risky. Supporters of this approach as a component of the investment climate are considering two main options: the investment potential and investment risk, investment risk and socio-economic potential. Sometimes it takes into account only the risks (credit).

Currently, the most consistent most of the requirements of a regional approach is factor method or resource assessment of the investment climate. Its benefits include the interaction of many regionally-singular potential resources of the investment process, as well as focus on the most efficient use of all possible sources of investment.

Дата добавления: 2015-11-14