International rating indicators of the state of the business environment and their use in management

Abstract

The purpose of the article is to determine the features and potential of international rating indicators for assessing the state of the business environment in the country, the possibilities of their use in management practice and ways to improve such an assessment. On the basis of a system analysis, the advantages and limitations of international rating indicators as indicators of the state of the business environment in the country are analyzed. Methods of scientific generalization were used to formulate the conclusions of the study. Statistical analysis made it possible to compare the dynamics of international rating indicators and the dynamics of foreign direct investment inflows on the example of the Ukrainian economy. Graphical analysis was used to evaluate the components of the international ranking for Ukraine. The comparison method was used to characterize the features of the business environment assessment using the most famous international rating indicators. A comparative analysis of the most well-known international rating approaches to assessing the state of the business environment has been carried out. Their indicator possibilities and limitations are determined. They were assessed for their complexity, validity and possibilities of practical use at the macro- and micro-levels of management. It has been determined that international ratings perform a certain signalling function for both residents and foreign investors, which creates opportunities for their use in the analytical work of managers at the business level. At the same time, the example of Ukraine shows the lack of correlation between rating indicators (such as Doing Business indicators) and indicators of foreign direct investment. This testifies to the „loyal” influence of international ratings on the behaviour of foreign investors. It has been determined that international ratings are based on methods that do not provide a sufficiently comprehensive coverage of the problem of assessing the business environment; to a greater extent, they are “aspect indicators” (primarily of legal and regulatory assessment). It is noted that in international ratings, mainly expert data is used, which makes the subjective factor dominant. Methods of international ratings provide for the assessment of the business environment due to the characteristics of its conditions, and not because of the resulting indicators of its functioning. Further developments to improve the assessment of the state of the business environment can be aimed at reducing the role of the subjective factor and introducing indicators of an actual resultant nature, in particular, indicators of attracting foreign direct investment. If the assessment “by conditions” occurs mainly on the basis of expert assessments, then the use of assessment methods “by results” means the transition to the use of actually statistical indicators. It is proposed to use foreign investment indicators as the resulting actual indicators of the state of the business environment.