Economic and institutional conditions for implementation of economic interests in the countries of the world

Abstract

The study investigates economic and institutional conditions for reproduction of economic relations and implementation of economic interests in the countries of the world. A new methodological approach to their estimation has been proposed; it is based on Ko-honen’s self-organising maps and allows processing a large amount of data, revealing system relationships between them, visualizing the results, grouping the countries of the world and comparing their economic and institutional capacities in the implementation of economic interests of the entities. The study applies both the indicators of the effectiveness of the economic and institutional environment and the entities’ perception of the level of protection of their property rights and interests and economic and institutional conditions in the country for the reproduction of economic relations. The analysis is based on macroeconomic statistics, which ensures the relevance and comparability of indicators in the countries of the world. The construction of a neural network has made it possible to identify groups of countries with an extremely low, low, middle and high level of economic and institutional opportunities for the reproduction of economic relations and implementation of entities’ interests. The approach is relevant as it provides for a thorough analysis, enables identifying the weak and strong points of the selected groups of countries and relationships between the macroeconomic situation and the economic activity, legal environment and government efficiency. It has been revealed that Ukraine belongs to the group of countries with extremely low potential for the reproduction of economic relations and implementation of entities’ interests; these countries are characterized by a low degree of economic freedom, low efficiency of government and regulatory sphere, weak innovation-investment orientation, high inflation rate and governance level, significant barriers to starting a business, problems in protecting property interests and rights. Recommendations for improving (maintaining) the efficiency of the economic and institution-al environment for each group of countries have been given. The proposed model can be used to assess the opportunities for implementing the economic interests of entities in countries of the world and for decision-making on foreign direct investment by potential investors.