Impact of Investment Activity on the Value of Agricultural Business

Abstract

The problem of increasing investment activity of agricultural business is raised, which is difficult to solve only at the expense of mechanisms of budget and credit support. It was revealed that against the background of the growth of borrowed capital, private investments in agriculture are declining. In an uncertain environment, investment decision support tools are needed to describe the return on investment and its potential effectiveness. The methodology of investment attractiveness diagnostics is systematized by the indicators of the method of estimation of economic value added and supplemented by models of dependence of yield spread on invested capital. The study was carried out taking into account two scenarios of product price growth under conditions: openness of the domestic market (scenario 1) and antisequences (scenario 2). Analytical and model calculations show the existence of economic incentives from investment of financial resources in agricultural business under both scenarios. Owners of invested funds in the first scenario will receive a large value, in the second scenarioa large yield of agricultural business. The results of the study will be useful to the agribusiness management bodies to coordinate strategic decisions to create a favorable investment climate in agriculture. Keywordsagrarian business, investment attractiveness, invested capital, economic added value, profitability spread.I.