Business environment of regions in Ukraine: Peculiarities of structural-institutional changes

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The development and efficient functioning of entrepreneurship is the basis of a market economy, as well as the key to the country’s innovative socio-economic development and growing competitiveness on an international scale. The formation of a transparent and qualitative business climate is an incentive for the efficient entrepreneurship development. The paper is aimed at identifying structural-institutional transformations in the business environment and their impact on the development of small businesses. The analysis of socio-economic parameters of the business environment is based on the elasticity method and the system approach, which have been tested on the example of cities in the Western region of Ukraine. Outlining the features of setting up the business environment and its functioning has provided the grounds for detecting major problems hampering efficient business development. The comparative analysis has confirmed a close relationship between socio-economic transportation processes and conditions created for businesses. The evaluation of institutional environment has confirmed that cities striving to improve transparency in climate regulation and urban environment management achieve the growing investment activity and positive dynamics of small businesses development. The calculated elasticity coefficients prove that the growing investment activity positively impacts the number of small businesses and the volume of products sold by them. However, the expected growth in employment was not achieved due to the high level of shadow activity on the labor market and migration activity of the population.

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    • Figure 1. Dynamics of the development of small enterprises in the cities of regional significance in the Western region, 2012–2017
    • Table 1. Matrix of cross-correlation between economic development and favorability of the business environment*
    • Table 2. Cities of the Western region in investment sector transparency rankings for the 100 largest cities of Ukraine
    • Table 3. Correlation between the socio-economic and institutional environment in the cities that are regional centers of Ukraine
    • Table 4. Evaluation of the impact of investment processes on structural transformations in small businesses in cities of regional significance in the Western region of Ukraine
    • Conceptualization
      Mariana Melnyk
    • Data curation
      Mariana Melnyk, Nadia Syniura-Rostun, Nataliia Lysiak
    • Investigation
      Mariana Melnyk
    • Methodology
      Mariana Melnyk, Nadia Syniura-Rostun
    • Resources
      Mariana Melnyk, Nataliia Lysiak
    • Supervision
      Mariana Melnyk
    • Writing – review & editing
      Mariana Melnyk, Andriy Dzyubina
    • Project administration
      Nadia Syniura-Rostun, Andriy Dzyubina
    • Validation
      Nadia Syniura-Rostun, Nataliia Lysiak, Andriy Dzyubina
    • Writing – original draft
      Nadia Syniura-Rostun
    • Formal Analysis
      Nataliia Lysiak, Andriy Dzyubina
    • Funding acquisition
      Nataliia Lysiak
    • Visualization
      Nataliia Lysiak, Andriy Dzyubina