The concept of behavioral finance in overcoming the crisis of real sector of the Ukrainian economy

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Authors:

O.A. Ostrovska, Cand. Sci. (Econ.), Associate Professor, State Higher Educational Institution “Kyiv National Economic University named after Vadym Hetman”, Senior Lecturer of the Enterprise Finance Department, Kyiv, Ukraine.

Abstract:

Purpose. The purpose of this article includes: the re-view of the basic postulates of the theory of behavioral finance, estimation of the impact of the behavioral factors on the effectiveness of management decisions, and delineation the ways of using the concept of behavioral finance in the practice of the crisis financial management for the enterprises of the real sector of the Ukrainian economy.

Methodology. The theoretical achievements of foreign and domestic scientists in the sphere of behavioral economics, behavioral finance, corporate finance, finances of enterprises of the mining complex serve the methodological basis of this research. The general scientific and special methods have been used to achieve the purpose, such as: dialectical, critical analysis, systematization and generalization of theoretical principles – during the studying of the economic essence of the subject and the forms of its manifestation, during development of the system of behavioral factors of crisis enterprises; comparison – during comparing and generalization of the global and Ukrainian practic-es of utilization of the theory of behavioral finance in crisis management of corporate finances, historical – in identifying specific developments in the concept of behavioral finance, statistical – in displaying the dynamics of the development of coal mining industry entities.

Findings. The author proves the influence of behavioral factors on the efficiency of the functioning of cor-porate finance and the need for taking them into account for improvement of the efficiency of financial management at enterprises of the real sector of the economy. The behavioral factors of the crisis state of the Ukrainian enterprises have been systematized. The ways of preventing and solving the problems of agency relations and asymmetric information distribution are offered. The author defines the industry peculiarities, factors reducing competitiveness and ways of overcoming the crisis at mining industry enterprises.

Originality. The ways of implementation of the basic postulates of the concepts of behavioral finance, common in foreign financial science, into practice of crisis management for enterprise finances of the real sector of the national economy are offered. The author substantiates the ways of solving conflicts of interest and asymmetric distribution of information in the sphere of corporate finance.

The author’s idea of the system and possibilities of consideration of the influence of behavioral factors in overcoming the crisis of finance for the real sector of economy of Ukraine has been formed.

Practical value. The author suggests the ways of use of the behavioral finance theory in the practice of crisis financial management for domestic enterprises of the real sector of the economy and the mining complex. The measures for the effective development of the coal industry in Ukraine are defined.

 

References:

 

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Tereshchenko, O.O. (2011), “Behaviorial controlling in the concept of behavioral finance”, Finansy Ukrainy, no.10, pp. 104–116.

 

2. Max Isaacman. (2000), How to Be an Index Investor. McGraw-Hill.

 

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The official site of Ministry of Energy and Coal Industry of Ukraine (2013), “Statistical information for January - De-cember 2012”, available at: http://mpe.kmu.gov.ua/fuel/control/uk/publish/article?art_id=231058&cat_id=35081 (accessed March 1, 2013)

 

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Makogon, Yu (2008), “Coal Industry Of Ukraine: The problems and prospects of sustainable development”, available at: http:// old.niss.gov.ua/Monitor/desember08/ 5.htm (accessed March 1, 2013)

 

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The official site of State Service of Mining Supervision and Industrial Safety of Ukraine (2012), “Private mines will no longer able to work „under pirate flags‟ ”, available at: http://www.dnop.kiev.ua/index.php? option=com_ content&task=view&id=6938&Itemid=182# (accessed March 1, 2013)

 

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