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The Influence Of The Enterprise Life Cycle On The Efficiency Of Investment

Author

Listed:
  • Viktor Koval

    (Department of Applied Economics, Odessa Institute of Trade and Economics of Kyiv National University of Trade and Economics, Ukraine)

  • Yuliia Prymush

    (Department of Accounting, Economics and Human Resources Management of Enterprise, Prydniprovska State Academy of Civil Engineering and Architecture, Ukraine)

  • Viktoriia Popova

    (Department of Accounting, Economics and Human Resources Management of Enterprise, Prydniprovska State Academy of Civil Engineering and Architecture, Ukraine)

Abstract

The article presents results of the study of relations between the enterprise life cycle and the efficiency of investment in the context of dynamic, rapid changes in the conditions of enterprises operation and development. It is determined that one of the main factors of success is the introduction of innovative technologies in the production process, which cannot be carried out without attracting investments. It is the investment activity of enterprises that determines the dynamics of their development, the level of competitiveness and the growth of productive resources, which affects the efficiency of their activities. It is proved that it is relevant to take into account the possible negative effects of the influence of factors divergence. The purpose of the study is to analyse possibilities of determining the impact of life cycle stages on the efficiency of investing in an enterprise. The methodological basis of the research is grounded on the general scientific methods of dialectics, observation, measurement, and formalization; methods of the system and statistical analysis. In particular, to determine the influence of internal factors on the indicators of the efficiency of investment activity of the enterprise at the stages of its life cycle, deterministic factor analysis is applied; methods of systematization and synthesis, analysis and synthesis are also used. It is determined that the construction industry plays a special role in the national economy since its development creates a synergistic effect for the development of other industries, increases the standard of living of the society through solving certain socioeconomic problems. The analytical data of construction enterprises activity in Dnipropetrovsk and Odesa regions of Ukraine became the basis for the approbation of the proposed approach. The use of the life cycle model of the enterprise, which includes the stage of growth (slow and rapid growth, stability stage) and the stage of the fall (slow and rapid fall, crisis stage), is substantiated. The features of investment activity according to the given stages of the life cycle of the enterprise are considered. It is determined that the growth and fall stages have a different effect on the nature of the investment indicators, which depends on certain factors. Further research is aimed at improving the mechanism of monitoring the environment in order to determine the force of factors influence on investment activity and implementation of preventive measures. The lack of a rapid reaction of the company to changes in the environment can lead to a crisis state of management, which determines the high degree of significance of adaptation for any life cycle of the enterprise.

Suggested Citation

  • Viktor Koval & Yuliia Prymush & Viktoriia Popova, 2017. "The Influence Of The Enterprise Life Cycle On The Efficiency Of Investment," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 3(5).
    • Handle: RePEc:bal:journl:2256-0742:2017:3:5:27
    DOI: 10.30525/2256-0742/2017-3-5-183-187
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    References listed on IDEAS

    as
    1. Danny Miller & Peter H. Friesen, 1984. "A Longitudinal Study of the Corporate Life Cycle," Management Science, INFORMS, vol. 30(10), pages 1161-1183, October.
    2. Aydoḡan Alti, 2003. "How Sensitive Is Investment to Cash Flow When Financing Is Frictionless?," Journal of Finance, American Finance Association, vol. 58(2), pages 707-722, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Viktor Koval & Olha Slobodianiuk & Volodymyr Yankovyi, 2018. "Production Forecasting And Evaluation Of Investments Using Allen Two-Factor Production Function," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 4(1).
    2. Viktor Zamlynskyi & Anastasiia Zerkal & Andrii Antonov, 2019. "A Conceptual Framework To Apply Financial Engineering At The Enterprise," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 5(1).
    3. Rehana Anwar & Jaleel A. Malik, 2020. "When Does Corporate Social Responsibility Disclosure Affect Investment Efficiency? A New Answer to an Old Question," SAGE Open, , vol. 10(2), pages 21582440209, June.
    4. An Thai & Radu Burlacu, 2022. "Adjustment Speed toward Target Leverage Throughout the Vietnamese Corporate Life Cycle: Under-Versus Over-the-Target Firms," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 18(3), pages 315-341, November.
    5. Olena Kakhovska & Tetiana Lositska & Katerina Kolesnikova, 2018. "Economic Efficiency Of Investments Into Personnel Development Of Enterprises," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 4(3).
    6. Liu, Shu & Wu, Yuting & Yin, Xiaobo & Wu, Bin, 2023. "Digital transformation and labour investment efficiency: Heterogeneity across the enterprise life cycle," Finance Research Letters, Elsevier, vol. 58(PC).
    7. Viktor Koval & Ganna Duginets & Oksana Plekhanova & Andrii Antonov & Mariana Petrova, 2019. "On the supranational and national level of global value chain management," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(4), pages 1922-1937, June.

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    More about this item

    Keywords

    enterprise life cycle; investment; stages of growth and fall;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing

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