The Journal of International Economic Policy

18

Authors: Olexandr Kravchenko

This article investigates the creation and monitoring of the fundamental value of a company, the methods of its valuation, and capital market responses to changes of the fundamental value. The author uses the basic theory of discounted cash flows as his main theoretical model. This theory states that the investment value equals the net present value of future cash flows that is created as a result of this investment. Other theories referred to in the article are derived from the aforementioned model. The article contains an empirical analysis of correlation dependence between the fundamental value and the market capitalization. The figures obtained from international companies during a 5-year time period showed that the highest indices of fundamental value increase were used as output data. The article argues that the total business return has the highest correlation index with respect to a company’s market value. The reasons affecting the results of the empirical research have been analyzed. The author gives some recommendations on the appreciation of a company’s market value.

21

Authors: Lesia Lyskova

In the article the author substantiates the need to pursue more energetically international innovative activity to raise the competitiveness of the national economy. Evaluating the current status of Ukraine’s innovation potential as compared with the EU countries, the author identifies the strategic priorities as well as institutional and financial mechanisms for building up the national innovation system. Expressed is the need to devise and implement measures to facilitate the interaction of Ukraine’s national innovation systems with those of the EU member countries. The author formulates proposals for concentrating international industrial and scientific-technological cooperation in a limited number of high-tech sectors.

22

Authors: Myroslava Munko

The author examines the issue of domestic market expansion within the context of the country’s economic growth. With the assistance of the Kalman filter she analyzes the effect of internal and external factors on the balance of external accounts — current and financial operations. Establishing the asymmetrical effect of domestic demand on the balance of external accounts (similarly, it concerns a series of exogenous factors), she substantiates the inadvisability of stimulating consumer demand at the expense of external borrowings. The author offers recommendations for self-sufficient animation of economic growth without upsetting the equilibrium of the external account.

34

Authors: Olga Usenko

The article gives a definition to the concept of "deep integration" taken by the Ukrainian Government as a framework concept for the establishment of a Ukraine-EU free trade area. The paper uses the term "deep free trade" or "free trade area +". It offers a review of the Ukrainian economy and its readiness to open such industries as mechanical engineering, chemical and light industry to free trade with the EU. It examines which cooperative steps might be taken in the sectors in question in the framework of a free trade area by identifying specific features of those sectors in Ukraine and the EU through SWOT analysis and review of certain provisions in relevant agreements between the EU and other countries. It proposes to forecast the possible impact of a free trade area on stakeholders` position regarding the agreement by using the "stakeholder approach" (identifying and classifying interest groups) and the European Commission’s method of ‘impact assessment". Based on the results of this research, conclusions are made concerning the fundamental negotiation principles for talks between Ukraine and the EU as to the economic and trade component of the new ‘enhanced agreement"