WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 19, 2022
Issues of Concern in Managing the Corporate Innovative Development
Author(s): Liliya Hrynash, Ihor Skvorzov, Nazariy Popadynets, Kateryna Nakonechna, Khrystyna Gorbova, Lina Artemenko, Oksana Svatiuk, Anatoliy Rybchuk, Igor Shchurov
Abstract: The method of researching the development of an innovative enterprise suggested in the paper shows two possible ways to perform it: firstly, when the Competitiveness Commission regulates the excess profits to avoid ageing of existing businesses, and secondly, when the process takes place without any interference, leading to accumulation of fictitious capital and avoidance of obsolescence. The methods allow calculating the pace of these processes. The method of researching the possible negative consequences of corporate innovative development is suggested. The following two elements are the methodological basis of the suggested method: development of the formalized economic conceptual framework and construction of generalizing model of technical change by Hicks, Harrod, and Solow. Classical technical change models were developed in the framework of production functions methodology based on the research of three main factors – capital and labor inputs, and output. The suggested conceptual framework largely eliminates these shortcomings. The use of formalized economic categories fundamentally changes the opportunities of modeling the production and financial-economic processes due to emerging opportunities to transfer from exogenous parameters and processes to consideration of their endogenous properties. One of the possible approaches to establishing the causes of fictitious capital accumulation and obsolescence of fixed assets of enterprises due to innovative activity in the singled-out conditionally closed system (industry, market, etc.) is outlined. The conditions and causes leading to the emergence of financial crises when fictitious capital grows by a significant amount are shown. The nature of the “dichotomy (duality)” of an innovative process is specified – the interests of an enterprise do not meet the public interests, so the country has to prevent the conditions of financial crisis emergence.
Keywords: Innovations, Innovative Process, Dichotomy of Economic Process, Fictitious Capital, Obsolescence, Financial Crisis, Production Function
DOI: 10.37394/23207.2022.19.178WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 19, 2022, Art. #178