Organizational and economic principles of diversifying the capital structure of agricultural production enterprises

Diversification and changes in the capital structure play an essential role in the agricultural industry’s reform, affecting the country’s productivity, competitiveness, and food security. Optimizing the equity and debt capital ratio helps increase enterprises’ investment attractiveness and financial stability. In this regard, the research aims to define and justify the organizational and economic principles of diversification of the capital structure of agricultural enterprises. The main principles of the transformational processes of the agro-industrial industry, caused by the diversification of the structure of capital forms, have been formed. The advantages of directing the diversification of the capital of enterprises in the direction of the growth of part of the equity capital are substantiated, which include increasing the financial stability of the enterprises of the industry, improving the productivity of production activities, reducing the risks associated with the credit load, increasing the investment attractiveness of enterprises, increasing competitiveness, improving long-term development prospects agricultural industry. The main directions of activating the growth of the equity capital of agro-industrial enterprises are proposed, which include expansion of equity financing, use of financial instruments, implementation of enterprise restructuring, optimization of costs in the direction of reduction, improvement of the productivity of the enterprise’s production activities, introduction of leasing and crowdfunding into financial activities. It is substantiated that the strategy for the development of enterprises in the agro-industrial sector of Ukraine during the crisis should focus on technological restructuring, long-term investments, and capitalization. Improving infrastructure that supports economic growth, job creation, and food security while considering environmental and health concerns plays an important role. Keywords: diversification, equity capital, loan capital, optimization, competitiveness, agricultural production enterprises.

Authors

Publication Details

Journal
Ukrainian Journal of Applied Economics and Technology
Published
2024-08-30
DOI
https://doi.org/10.36887/2415-8453-2024-3-24
Primary Topic
Economic and Business Development Strategies
Type
article
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article

Organizational and economic principles of diversifying the capital structure of agricultural production enterprises

Victoria Ryzhova, Ivan Kaitanskyi, Kateryna Garbazhii
Ukrainian Journal of Applied Economics and Technology
Economic and Business Development Strategies
article

Organizational and economic principles of diversifying the capital structure of agricultural production enterprises

Victoria Ryzhova, Ivan Kaitanskyi, Kateryna Garbazhii
article en

Abstract

Diversification and changes in the capital structure play an essential role in the agricultural industry’s reform, affecting the country’s productivity, competitiveness, and food security. Optimizing the equity and debt capital ratio helps increase enterprises’ investment attractiveness and financial stability. In this regard, the research aims to define and justify the organizational and economic principles of diversification of the capital structure of agricultural enterprises. The main principles of the transformational processes of the agro-industrial industry, caused by the diversification of the structure of capital forms, have been formed. The advantages of directing the diversification of the capital of enterprises in the direction of the growth of part of the equity capital are substantiated, which include increasing the financial stability of the enterprises of the industry, improving the productivity of production activities, reducing the risks associated with the credit load, increasing the investment attractiveness of enterprises, increasing competitiveness, improving long-term development prospects agricultural industry. The main directions of activating the growth of the equity capital of agro-industrial enterprises are proposed, which include expansion of equity financing, use of financial instruments, implementation of enterprise restructuring, optimization of costs in the direction of reduction, improvement of the productivity of the enterprise’s production activities, introduction of leasing and crowdfunding into financial activities. It is substantiated that the strategy for the development of enterprises in the agro-industrial sector of Ukraine during the crisis should focus on technological restructuring, long-term investments, and capitalization. Improving infrastructure that supports economic growth, job creation, and food security while considering environmental and health concerns plays an important role. Keywords: diversification, equity capital, loan capital, optimization, competitiveness, agricultural production enterprises.

Ukrainian Journal of Applied Economics and TechnologyVol. 2024(3)
Openalex Percentile: Top 79%
Economic and Business Development Strategies
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