Trends and Prospects for the Convergence of Public-private Partnerships` Financial Potential in Ukrainian Regions

Abstract

In Ukraine, the development of partnership between the state and business is at an early stage, especially has not explored the need and PPPs` financial potential for Ukrainian regional development. The possibility of using public-private partnership in the implementation of regional development programs in local economic and institutional realities has not identified. That can be achieved in the presence of convergent-divergent trends for PPPs` public, private and financial and credit levels in Ukrainian regions. This identified the necessity the analysis of Ukraine's regions in terms of convergence the levels of PPPs` financial potential. The main aim of the research is to identify convergent-divergent processes (convergence / zoom) Ukrainian regions in terms of potential public-private partnership and analyse the prospects and directions of approaching depressed Ukrainian regions to more advance. Study Design: The reviews were carried out in the period 2003–14 on the basis of studying the Ukrainian region development trends of PPPs` financial potential as well as on the basis of the research results obtained by country statistics. Place and Duration of Study: Research Centre for Industrial Development Problems of NAS of Ukraine, Simon Kuznets Kharkiv National University of economics, Department of Financial services management between January 2014 and December 2015. Methodology: Regression analysis and bibliographic retrieval have been used as the main methods of research, which allowed making a meaningful analysis of classic papers and researches of modern economists-practitioners devoted to the peculiarities of the Ukrainian trends in convergent-divergent trends for PPPs` financial potential. Computations were performed in Application Software Package “Statistica 8”. Results: The article demonstrates a procedure for determining the convergent-divergent trends and justification of prospects for increasing the public-private partnerships` financial potential in Ukrainian regions, which is the based on the adjustment of the financial policy. There was calculated the probability of transition regions to cluster a higher level of PPPs` financial potential. Proceeding from it there was advice for the state support this process which will increase the financial potential sectors PPP in Ukrainian regions. Conclusion: Regions with a high probability cluster 3 require significant state support and formation of appropriate financial incentives to empower their development. Competence in government financial policy to prevent a significant decline against the backdrop of some other areas, by creating a system of relationships between the regions and the competitive advantages of the least developed among them. Overall, the apparent disparity of Ukrainian regions for public-private partnership financial potential requires the formulation of proposals to help create conditions for interregional equalization. Additional analysis will identify factors that causes affect the process of convergence Ukrainian regions for levels of PPPs` financial potential and provide guidance for the development of competitive advantages of the least developed regions.