Investment attractiveness of territorial communities as a factor in the development of small businesses in the context of financial decentralization
DOI:
https://doi.org/10.26906/EiR.2026.2(101).4629Keywords:
investments, investment attractiveness, investment policy, institutional support, local budgets, small business, innovative management technologies, territorial communities, financial decentralizationAbstract
The article is devoted to the study of the investment attractiveness of territorial communities in the context of financial decentralization and the institutional capacity of local governments of Ukraine to stimulate the development of small businesses as a key factor in the sustainability of local economic systems. The article proves that after the deepening of fiscal decentralization, the investment attractiveness of communities has acquired a new meaning and began to be considered not only as a derivative of the resource base, but primarily as a function of the quality of local public management. It was established that in 2025, UAH 514 billion was received to the general fund of local budgets, which is UAH 63 billion more than in 2024, and the growth rate amounted to 14%, indicating the preservation of the financial capacity of communities to influence local development even under conditions of a wartime economy. At the same time, it is shown that the increase in revenues in itself does not automatically lead to higher investment attractiveness if financial resources are not transformed into effective mechanisms for reducing local business risks. A detailed analysis of small business confirmed its system-forming role in the local economy. Based on the dynamics of individual entrepreneurs, it is substantiated that the small business sector in Ukraine has not only been preserved but has also demonstrated a recovery trajectory, which makes it possible to interpret the number of sole proprietors as an indicator of entrepreneurial activity of the population, the adaptability of the business environment, and the potential for expanding the local tax base. Another important result of the study is the identification of a direct relationship between entrepreneurial activity and the financial capacity of territorial communities. It is shown that only 34.3% of communities have a high level of financial capacity, while 26.2% are in the zone of low or critical levels. This made it possible to conclude that investment attractiveness is formed under conditions of significant territorial differentiation and, therefore, cannot be supported by universal instruments. The most significant result of the study is the development of a differentiated approach to supporting small business depending on the level of financial capacity of territorial communities.
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