Regional strategies as an uncertainty reducing factor for investors
https://doi.org/10.17073/2072-1633-2020-1-4-17
Abstract
The process of strategic investment decisions making in the context of regional production diversification requires a detailed analysis of factors that potentially affect the expected results. The model construction of cash flows generated by a project with strategic potential for the enterprise requires a detailed study of both internal technological characteristics that determine the potential results of its implementation and external factors. In the system for evaluating such characteristics, the risk of making an investment decision is important. If the internal characteristics lend themselves to relatively reliable estimates, then the external ones are often extremely uncertain. A factor that significantly reduces the uncertainty of internal corporate evaluations is the availability and consistent implementation of the company’s strategy - a document that is fully accessible to managers and inaccessible to competitors. At the same time, in order to reduce external uncertainty when choosing a region for implementing an investment project, the presence of a regional development strategy, its quality and degree of implementation becomes a significant factor. The article examines the impact of such strategic instruments on reducing the risk level of investment projects, provides arguments in favor of the need for the development and consistent implementation of regional strategies that form the basis for more accurate justification by investors of cash flows that vary depending on the regions of implementation.
About the Author
M. K. Alimuradov
Moscow School of Economics Lomonosov Moscow State University
Russian Federation
Russian Federation
Murad K. Alimuradov – PhD (econ), Associate professor.
1-61 Leninskie Gory, Moscow 119991.
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For citations:
Alimuradov M.K. Regional strategies as an uncertainty reducing factor for investors. Russian Journal of Industrial Economics. 2020;13(1):4-17. (In Russ.) https://doi.org/10.17073/2072-1633-2020-1-4-17
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